AN ANALYTICAL STUDY ON IMPACT OF MGNREGS ON AGRICULTURAL LABOUR SUPPLY OF KOZHIKODE DISTRICT

Minor Research Project Report Submitted to the University Grants Commission, New Delhi In partial fulfillment of the requirements for the Completion of Minor Research Project

By

MUHAMMED SALIM. K.C Assistant Professor

POST GRADUATE AND RESEARCH DEPARTMENT OF COMMERCE GOVT. COLLEGE MADAPPALLY VADAKARA-2 KOZHIKODE

DECLARATION

I hereby declare that the project report entitled “AN ANALYTICAL STUDY ON IMPACT OF MGNREGS ON AGRICULTURAL LABOUR SUPPLY OF KOZHIKODE DISTRICT” is a bonafide Minor Research Project work done by me and I further declare that this report has not been submitted anywhere for the award of any degree or other recognition.

Madappally Muhammed Salim. K.C

Date:

CERTIFICATE

This is to certify that Minor Research Project titled “AN ANALYTICAL STUDY ON IMPACT OF MGNREGS ON AGRICULTURAL LABOUR SUPPLY OF KOZHIKODE DISTRICT” is an original work done by Muhammed Salim. K.C, Assistant Professor, Post Graduate and Research Department of Commerce, Govt. College Madappally. He is permitted to submit the report to University Grants Commission.

Place: Madappally Principal Date:

Acknowledgement

I am very happy with completion of this project work and for me it is a great achievement. I am indebted to many people for their immense help and support for the completion of this work. With these few word officially I can convey my thanks but I cannot convey the depth of my gratitude to all those who helped me a lot.

I express my sincere thanks to the Principal, Govt. College Madappally and my gratitude to Head of the Department and all the other colleagues in the Post Graduate and Research Department of Commerce for their cooperation and valuable suggestions.

I am indebted to the University Grants Commission very deeply for sanctioning this project and allotting fund for the research work.

I express my thanks to all my Post Graduate students who were always with me for all the assistance while conducting this study.

Moral and mental support from my family including my parents, wife and children were inevitable for the completion of this task otherwise I could not be able to complete this work in time.

Moreover I am very thankful to the god almighty for giving health and strength to complete this work successfully.

Muhammed Salim. K.C

Abstract

Mahatma Gandhi National Rural Employment Guarantee Act is a flagship programme of central government of India for eradicating poverty from Indian economy. Around 60 % Indian population is living rural area and most of them are suffering from severe poverty and unemployment. National Rural Employment Act, 2005, enacted on 25th August 2005. NREGA is a first in its kind, passed by Government of a nation in the world. This Act guarantees 100 days employment for rural unemployed mass willing to do unskilled manual work. The act came into force from February 2006 initially in 200 backward district of the nation and then it extended to all rural districts of India in two other phases. The Act was initially called National Rural employment Guarantee Act (NREGA) later renamed as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2009. Some challenges of Indian economy even today are Poverty, Development of rural India and Building infrastructure. Country need to invest more in health and education of the growing population. Human capital is the biggest asset of India but we don’t have that much opportunity to exploit this strength and this less employment opportunity contributing more on poverty of the economy.

MGNREGA is the most significant movement from Central Government of India after Independence and it ensured grass root level participation of every citizen of India. Act ensures selection of beneficiaries through a democratic process and a multiple layer social audit and transparency mechanism to keep the proposed objectives. Planning of work under MGNREGA at village level contribute more on sustainable and equitable development of villages. Another achievement of this programme is that it has caused for the improvement in quality of life of rural household who were migrating to cities for the search of employment, by channelizing rural workforce towards developmental activities at own village level.

Beneficiaries enrolled to this programme mostly are unskilled rural mass who were jobless or working in agricultural sector before joining into this scheme. As far as State of Kerala is concerned market wage rate has been more than double

of the wage guaranteed by MGNREGA always. Hence enrollment rate of males are very less if we are comparing with rate of females. While making an analysis on the personal profile of those who enrolled in to this scheme it shows that most of the male members joined into this scheme are not capable to do job which require heavy efforts. Female members who do not have regular employment are also enrolled to this scheme. This study try find out the positive and negative impact of MGNREGA on the agricultural labour supply of Kozhikode district, Kerala. MGNREGA does not permit any direct involvement in agricultural related work or work they are repetitive in nature. Under a descriptive research framework, through rigorous statistical procedure on the multiple responses of workers and farmers, the study was able to make out prolific finding relevant to future of MGNREGA and its impact on the agricultural labour supply. Study reveals that programme has not affected to the supply of labourers into the agricultural sector but in case of female workers there is small shortage because they prefer to work under MGNREGA when the works are available. It is found that the scheme have big role in the eradication of poverty in rural area and it has caused for the social and economic empowerment of women who enrolled into the programme. Beneficiaries have certain complaint on the delay in transfer of wages, non-availability of guaranteed days of employment and other procedural delay in the operational side of the programme.

Contents

Page Chapters No Chapter 1 Introduction 1-14 1.1 Introduction of the study 1 1.2 Origin of research Problem 2 1.3 Significance of the research study 3 1.4 Scope of the study 6 1.5 Objective of the research study 6 1.6 Definition of terms used 7 1.7 Hypothesis 10 1.8 Research Design 10 1.8.1 Source of Data 1.8.2 Tools used for Survey 1.8.3 Survey Area 1.8.4 Measurement Variables 1.9 Sampling Design 12 1.9.1 Population for study 1.9.2 Sample size 1.9.3 Sample frame and selection of samples 1.10 Period of reference 13 1.11 Tools for Data Analysis 14 1.12 Limitations of the study 14 Chapter 2 Review of Literature 15-25 2.1 Introduction 15 2.2 Literature review 15 2.3 Summary 25 Chapter 3 Rural Employment Guarantee Schemes in India- An 26-70 Overview 3.1 Introduction 26 3.2 Employment Generating Programmes Implemented in India 29 3.2.1 Self-employment programmes in India 3.3 Wage Employment Programmes in India 36 3.4 Mahatma Gandhi National Rural Employment Guarantee 40 Act (MGNREGA) 3.4.1 Objectives of MGNREGA 3.4.2 The Salient design features of MGNREGA 3.4.3 Funding Pattern of MGNREGA 3.4.4 Qualifications for employment and rights of workers under the Act.

Page Chapters No 3.4.5 Implementing and monitoring agencies of the scheme. 3.4.6 Performance of MGNREGA 3.5 MGNREGA in Kerala 59 3.5.1 Unemployment in Kerala 3.5.2 Performance of MGNREGA in Kerala 3.6 MGNREGA and Kozhikode District 69 Chapter 4 Impact of MGNREGS on Agricultural Labour Supply of 71-93 Kozhikode District 4.1 Introduction 71 4.2 Data Analysis 72 4.2.1 Age analysis of the respondents 4.2.2 Gender wise age analysis of the respondents 4.2.3 Religion and Cast analysis of the respondents 4.2.4 Educational qualifications of the respondents 4.2.5 Marital status of the respondents 4.2.6 Year of enrollment to MGNREGS 4.2.7 Occupation of the respondents before enrolling into MGNREGA 4.2.8 Source of worker’s income other than MGNREGA 4.2.9 Annual family income of the respondents 4.2.10 Contribution of MGNREGS wage to individual income of respondents 4.2.11 Market wage rate analysis 4.2.12 Relationship between increase in MGNREGA wage and increase in rural average agriculture sector wage 4.2.13 Preference of Agricultural labour over MGNREGA 4.2.14 Social inclusion of MGNREGA workers 4.2.15 Economic empowerment of MGNREGA workers 4.2.16 MGNREGA and financial inclusion of rural women 4.2.17 Problems faced by MGNREGS workers 4.2.18 Improvements in MGNREGA expected by the workers 4.3 Conclusion 92 Chapter 5 Finding, Policy Recommendation and Conclusion 93-101 5.1 Introduction 93 5.2 Findings 93 5.3 Policy Recommendations 97 5.4 Conclusion 100 5.5 Contribution of the study 101 5.6 Scope of further research 101 Bibliography 102-105 Appendix 106-110

List of Tables

Table Page Particulars No. No. 1.1 Detailed description of survey area 11 3.1 Employment Growth in India (in Million) 27 3.2 Growth of unemployment in India 27 3.3 Details of assistance granted and beneficiaries of IRDP 30 3.4 Details of assistance given and performance of TRYSEM 31 3.5 Financial details of DWCRA 32 3.6 Financial analysis of SITRA 33 3.7 Performance analysis of MWS 34 3.8 Expenditure and benefits details of SGSY 35 3.9 Phases of MGNREGA implementation 41 3.10 Implementation process in Kerala 41 3.11 Steps of Indian Journey towards MGNREGA (1952-2009) 42 3.12 Multiple Goals of MGNREGS 46 3.13 Major Changes in MGNREGA (2006-2014) 47 3.14 Notified Wage and its enhancement from 2006 to 2014 (Rs. 51 /Day) 3.15 Coverage of MGNREGA at a glance 55 3.16 Financial analysis of MGNREGA at a glance (Rs.in CR) 55 3.17 Employment creation by MGNREGA at a glance (in lakhs) 56 3.18 Performance analysis of MGNREGA 57 3.19 Demographic profile of Kerala State 59 3.20 Work profile of Kerala population 60 3.21 District wise details of Unemployment in Kerala 62 3.22 Demand for Employment in Kerala from 2001-2011 (in Lakh) 63 3.23 Job Cards Issued in Kerala under MGNREGA 64 3.24 Details of work demanded and provided in Kerala under 65 MGNREA 3.25 Employment provide on demanded under MGNREGA in 66 Kerala

Table Page Particulars No. No. 3.26 Generation of employment in Kerala under MGNREGA 67 3.27 Households completed guaranteed number of employment 67 3.28 Financial Analysis MGNREGA in Kerala 68 4.1 Age group of respondents 72 4.2 Gender wise classification of respondents and their age group 73 4.3 Religion wise classification of the respondents 74 4.4 Cast wise classification of the respondents. 74 4.5 Educational qualification of respondents 74 4.6 Marital Status 75 4.7 Year of enrollment in MGNREGS 76 4.8 Occupation wise classification of the respondents 77 4.9 Source of Income other than MGNREGA 78 4.10 Annual family incomes of the respondents. 79 4.11 Worker’s contribution to Total Family income 79 4.12 Contribution of MGNREGA wage to individual income 80 4.13 Average Market rural agricultural sector wages in Kozhikode 81 District 4.14 Comparison of % increase in MGNREGA wages and % 82 increase in rural agricultural wages 4.15 Willingness to accept agricultural employment, when 83 MGNREGA scheme is not active 4.16 Preference of agricultural sector job over MGNREGA 84 4.17 Reasons for preferring agricultural job over MGNREGA 84 4.18 Social inclusion status of workers after enrolling to 85 MGNREGA 4.19 Economic Empowerment status of Workers after registering 87 under MGNREGA 4.20 Financial inclusion status of women workers after registering 88 under MGNREGA 4.21 Problems of MGNREGS identified by the workers 89 4.22 Workers expectation on MGNREGA 91

List of Figures

Table Page Particulars No. No.

3.1 Performance of MGNREGS between 2006-07 and 2013-14 57

3.2 Average number of Person days per household between 58 2006-07 and 2013-14.

4.1 Age wise classification of the Respondents of the Scheme 72

4.2 Gender wise age classification of respondents of the scheme 73

4.3 Education Status of Respondents 75

4.4 Annual enrolments to the Scheme 76

4.5 Occupation wise classification of the respondents 77

4.6 Family Income of Respondents 79

4.7 Market rural agricultural sector average wage rate in 81 Kozhikode District before introduction of the scheme

4.8 Market rural agricultural sector average wage rate in 81 Kozhikode District after introduction of the scheme

4.9 Comparison between increase in MGNREGA Wages and 83 Rural Agriculture Wages

Abbreviations

NREGA : National Rural Employment Guarantee Act MGNREGA : Mahatma Gandhi National Rural Employment Guarantee Act MGNREGS : Mahatma Gandhi National Rural Employment Guarantee Scheme MoA : Ministry of Agriculture MoRD : Ministry of Rural Development UPA : United Progressive Alliance NRLM : National Rural Livelihood Mission CEO : Chief Executive Officer SERP : Society for Education of Rural Poverty SHGs : Self Help Groups LSG : Local Self Government IFPRI : International Policy Research Institute NSSO : National Sample Survey Organization NSS : National Sample Survey IRDP : Integrated Rural Development Program SGSY : Swarnajayanti Gram Swarozgar Yojana TRYSEM : Training Rural Youths for Self Employment DWCRA : Development of Women and Child in Rural Areas UNICEF : United Nations International Children Education Fund SITRA : Supply of Improves Toolkits to Rural Artisans GKY : Ganga Kalyan Yojana MWS : Million Wells Scheme MRAE : Ministry of Rural Areas and Employment APL : Above Poverty Line BPL : Below Poverty Line DRDAs : District Rural Development Agencies NGOs : Non-Governmental Organizations ILO : International Labour Organisation UN : United Nations SC/ST : Scheduled Cast / Scheduled Tribe

NPA : Non-Performing Assets RMP : Rural Manpower Programme RWP : Rural Work Programme WEP : Wage Employment Programme CSRE : Crash Scheme for Rural Employment PIREP : Pilot Intensive Rural Employment Programme SFDA : Small Farmers Development Agency Programme FWP : Food for Work Programme NREP : National Rural Employment Programme RLEGP : Rural Landless Employment Guarantee Programme EAS : Employment Assurance Scheme JRY : Jawahar Rozgar Yojana JGSY : Jawaha Gram Samriddhi Yojana IAY : Indhira Awas Yojana SGRY : Sampoorna Grameen Rojgar Yojana CDP : Community Development Programme MFAL : Marginal Farmers and Agriculture Labour Scheme DPAP : Drought-Prone Area Programme TPP : Twenty Point Programme NFFWP : National Food for Work Programmed NRM : Natural Resource Management PRIs : Panchayati Raj Institutions RNFE : Rural Non-Farm Employment NEGC : National Employment Guarantee Council SEGC : State Employment Guarantee Council NBA : Nirmal Bharath Abhiyaan DPC : District Programme Coordinator NRI : Non-Resident Indian SSLC : Secondary School Leaving Certificate

Chapter 1 INTRODUCTION

1.1 Introduction of the Study

Status of poverty in the economy will be very worst when rate of unemployment reaches two digits, this situation will put more pressure on ruling Governments to create more employment opportunity and give a relief to people who suffer from the evils of poverty. Otherwise they can’t continue in power when people start agitation against poverty and unemployment. Pressure mounted to the Government of India has caused for given birth to National Rural Employment Guarantee Act (NREGA) in 2005. Act provides guaranteed 100 days employment for one eligible rural household. The act came in to effect during February 2006, initially in 200 selected back ward district of the nation. Palakkad and Wayanad were selected from the state of Kerala in the first phase. Then the scheme was extended to all the district of India in another two phases. On 2nd October 2009 the Act was baptized as Mahatma Gandhi national Rural Employment Guarantee Act (MGNREGA). The scheme has completed 11 years in its operation and is proved as a golden opportunity for the rural poor in the country.

Government has increased guaranteed minimum wage number of times, now the enrolled members are able to get a wage of maximum 24200 in a financial year from this scheme. This reveals that the scheme has caused for the increase in socio economic status of the rural poor in the country. In case of developed state like Kerala market wage rate is very higher than the rate offered under MGNREGA so the enrollment rate to the scheme is diminishing year by year. More over male worker are drawing wage almost 200% higher than the offered by this scheme, their enrolment rate is also very less. Male members they are physically week to do other work and those who are actively engaged in agricultural activity are only registering to this scheme. This study reveals that most of people enrolled into the scheme are Introduction 2 educational qualification below +2/ Pre University, from this information researcher can conclude that educated community shows some negligence to register in this scheme.

MGNREGS does not offer any employment, they are directly related farming or agricultural production, provisions of the Act are not permitting works they are repetitive in nature. This scheme concentrates more on creation of assets like roads, mechanism to prevent soil erosion etc. Many of the past studies conducted in the some back ward districts of Kerala and States like Andhra, pointed out that introduction of MGNREGA have an impact on agricultural labour supply, since the agricultural activities are seasonal, workers prefer MGNREGS which ensure a minimum number of work days in a year and a particular amount of wage was also guaranteed. This study tries to examine the situation in Kozhikode District, Kerala. Kozhikode district is one among the Developed Districts in Kerala. Due to the influence of Gulf money, market wage rate is very high when we compare the same with state average. Result of the study shows a different result when we compare the same with studies conducted in other states and other district of Kerala. Introduction of the scheme Mahatma Gandhi National Rural Employment Guarantee Scheme do not have any negative impact on the agricultural labour supply of the district. Situation of labour supply to agriculture is almost constant when we compare the same before and after introduction of the Scheme MGNREGS. This research work finds the reasons for the happening of this particular situation.

1.2 Origin of Research Problem

After the introduction of new economic policy in 1991 Indian economy have been growing very quickly, urbanization and development in urban area also happened along with this movement. But the rural India was struggling to grow along with the above developments and poverty was identified as the major reason of this phenomena and unemployment was also identified as the cause for it. UPA Introduction 3 led Government which was in power during the beginning of 21st Century identified the issue and decided to introduce a programme which ensure minimum number of employment and maximum wage for the unemployed mass in the rural area. This was the beginning of the historical movement National Rural Employment Guarantee Act 2005 (NREGA), which came into force in February 2006. Later on 2009 October 2nd Central Government Has decided to rename the Act as mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The Scheme introduced (MGNREGS) is regarded as a “boon to the poor” as it has offered number of benefits to rural poor. A rural poor family can utilize its idle manpower to earn income more than 25000 per month. This has resulted in socio economic empowerment of rural India, especially to rural women.

There are number of precious assets and infrastructure which has been created using manpower under this scheme. From some corners, criticism has arrived showing that asset generated under the scheme are lacking quality and not having long life. This programme is implemented under the supervision of local bodies like panchayats and Block panchayats. Moreover there exists a multi layered social audit system with the participation of citizens, which ensures the efficient implementation of the programme. While conducting the sample survey researcher has identified some problems relating to implementation side of the programme. In certain local bodies supervision is not up to the mark and at grass rot level proper planning is not done which may cause for the wastage of fund. Some of the other issues are delay in issuance job card and this is leading to the delay in work under the scheme. Everybody participated in the survey mentioned that delay in transferring wage under this scheme is important drawback of the programme.

One of the other major criticisms is that MGNREGS has created a negative impact on the availability of labor in the agricultural sector which contributes around 65 % of national income and at the same time it has caused for increase in wage rate also in some states. It is also alleged that labourers prefer works in MGNREGS over other works, owing to its less toil, less supervision and provision Introduction 4 of other facilities. Due all this allegations the (MoA) Ministry of Agriculture has many times requested to (MoRD) Ministry of Rural Development to put a hold on the scheme during the time of agricultural farming and the harvesting for ensuring availability labour force in the agricultural sector. In this scenario it is very significant to conduct a study on shortage labour in the agricultural sector and introduction of MGNREGA to find whether the shortages are related to this scheme or not. In this study researcher tries to make analysis of situation in the Kozhikode district of Kerala, where MGNREGS is very successfully implemented and functioning very smoothly.

1.3 Significance of the Research Study

MGNREGA is flagship event happened in India after independence and introduction of this scheme has created some positive impact in Indian rural community especially in the case of rural women. It has helped in the socio economic empowerment of rural mass of India. Since the scheme is very productive in Indian Scenario any study related this programme is highly significant. Major portion of Indian population constitutes unskilled labourers and most of them were earning their bread and butter from the agriculture sector employment. But the Indian agricultural sector is still depending on monsoon and the employment of this sector seasonal in nature. So this sector offers very few work days and this has caused for the poverty of India especially rural India. As discussed earlier balanced development of urban and rural region are compulsory to attain the overall development of the economy and the nation.

MGNREGA is the only act that provide compulsory job for 100 days for any adult member of the household in rural areas. According to Shah (2012), MGNREGA now changed the old saying of “jab kaamkhulega, tab kaammilega” into “jab kaammaangenge, tab kaamkhulega”. Revised rule of MGNREGS allows farmers to utilize its works force for agricultural sector also. This will help the small and medium scale farmers for reducing their labour shortage and increase Introduction 5 production. Many studies revealed that this scheme would help the marginal and small farmers who are unable to hire agricultural labour due to high wage rates. MGNREGA has increased farm income of the small and marginal farmers, because they have been able to increase input in their farms such as irrigation, fertilizer and hybrid seeds. But, medium and large farmers face low labour supply in agriculture, because of MGNREGA work as farmers are unable to provide the wage rates more or equal to MGNREGA. In February, 2012 the Union Government announced that agricultural labour shortage in the villages are due two reasons, due to MGNREGA and migration of rural youth for education to the cities.

According to the various studies held in different states of India, MGNREGA has two side impact on socio-economic status in rural areas i.e., positive and negative. Positive impact of MGNREGA is that it increases bargaining power among the labourers and empowering the women in terms of wage rate (Equal to men). The labourers are now not dependent on landlord’s work and they do not need to leave the village for their livelihood. Later impact revealed that it has created labour shortage for agriculture and increased high wage rate in the rural areas due to minimum wage rate of Rs. 120-150 (depending on region/state). As Jacob (2008) reported that “the aspect of NREGA where it can be used to curb rural-urban migration was conditional on the NREGA being implemented well in that region, otherwise, if work was not supplied, if wages weren’t paid on time and if money was just being siphoned off, then workers will have no incentive to stop migrating”. He also stated that “the Rural Employment Scheme has made zero impact on the livelihood security of Orissa’s (KBK-Kalahandi-Bolangir-Koraput) rural poor. Land owners are also not satisfied with NREGA, because they were facing labour shortage due to high mandatory wage rates of NREGA compared to earlier wage rate”. Similarly, Roy and Dey (2010) observed that “as a result of NREGA the rural labour demanded minimum wages from all employers, landlords and contractors”. Introduction 6

Situation of Kerala is little different from other states in India, market wage rate in Kerala is always higher than the wage fixed by MGNREGA. So this scheme is not that much attracted the youths of the state. More over education status of Kerala is higher than the people living in other states, and most of them prefer white collar job. In this scenario it is significant to know the impact of MGNREGA on the agricultural labour supply, number of related studies have been conducted in different part of the nation and find that it has both positive and negative impact on agricultural labour supply, researcher tries to make an analytical study on the situation prevailing Kozhikode district.

1.4 Scope of the study

The study concentrates on the impact of MGNREGA on the agricultural labour supply of Kozhikode District. Study covers laboureres who enrolled to the scheme MGNREGS. Study aims to track the changes happened to Employees and cultivation after the introduction of MGNREGA. Such information helps the researcher to reach to a conclusion regarding the positive and negative influence of the scheme on the labour supply to the agricultural sector. Besides this the study provides key information regarding impact of the scheme; and the problems and prospect of the scheme. Study were conducted in selected 24 Gram Panchayats of Kozhikode district, two Panchayats form each Block, where MGNREGA scheme is introduced.

1.5 Objectives of the Research Study

1. To compare the flow of workers into the agricultural sector before and after the implementation MGNREGS 2. To identify the extent of the transfer of labour from agriculture sector to MGNREGS. 3. To identify the reasons for the shortage of labour, if any in agricultural sector. 4. To identify the reasons for diminishing rate of enrollment to MGNREGS. Introduction 7

5. To analyze the impact of MGNREGS on wage rate. 6. To evaluate the socio economic impact of MGNREGS. 7. To assess the problems and prospects of MGNREGS.

1.6 Definition of Terms Used

Various terms, variables, measurement and testing criteria used in the study defined as follows:

 Employment guarantee scheme

It is programme which ensures a minimum number of work days to people in a financial year. Mahatma Gandhi National Rural Employment Guarantee Act proposed such a scheme for Indian rural people.

 Minimum wage

A particular amount of payment guaranteed for a job

 Unskilled labour

A worker who did not get any training for engaging a particular employment

 Semi-skilled labour

A worker who underwent for training for undertaking a job, but he/she is not fully qualified for doing any of the jobs.

 Skilled labour

Skilled labourers are specially trained in doing an employment and they can complete the task professionally using the acquired knowledge.

 Wage Employment programme

It is scheme offering a fixed amount wage for day of work. Wage may be in cash or in kind or a combination of both of this. Introduction 8

 Unemployment

It is the state of being not actively engaged in work by an individual during a particular period.

 Seasonal Employment

State of being a person engaged in work during particular season only, as far agriculture is concerned, during the time of farming and harvesting.

 Job Card

It is a card issued by the concerned local bodies to a household as a proof of their registration under MGNREGA.

 Work days

It is the number of days of work available in a year to a member under this Act.

 Non-Performing Assets (NPA)

It is the unpaid portion of loan given to a person by a financial institution or any governmental or quasi-governmental organisation.

 Subsidy

It is the portion of credit given to a person by the governmental institutions, where the liability of repayment of such credits are undertaken or guaranteed by the government.

 Literacy

It is the ability of an individual to read, write and communicate in his mother tongue. Introduction 9

 Household

A house and its occupants regarded as a unit.

 Unemployment Rate

It is the ratio of unemployed population with the total population in a particular locality or even a country.

 Sex Ratio

It is the ratio of females to 1000 males in a particular locality or a state or a country.

 Gram Sabha

A meeting of all adults who live in an area covered by a panchayath ward.

 Poverty Eradication

It is the process of removal of poverty and its symptoms from a society.

 Employment Guarantee Programme

It is a programme put-forward by the government or any such agency which assures minimum work days in a financial year for a person enrolling the programme.

 Wage Employment Program

It is a programme put-forward by the government or any such agency which pays minimum guaranteed wages to the person enrolling the programme and other benefits are given according to his work days.

 Self-Employment

The state of being in employment for oneself as a freelance employee, rather than being a worker under an employer or being the owner of a business. Introduction 10

1.7 Hypotheses

1. MGNREGA has caused for the increase in market wage rate. 2. There is a significant relationship between increase in MGNREGA wage and increase in agricultural sector wage. 3. MGNREGA has certain role in economic empowerment of workers of the scheme. 4. MGNREGA has caused for the social inclusion of workers of the scheme. 5. MGNREGA has resulted in financial inclusion of rural women.

1.8 Research Design

This research work is designed as basically descriptive in nature but the objectives of the study are structured to explore a detailed idea on the research problem and problems and prospects of MGNREGA in Kozhikode district. This study makes use of discriminant model for deciphering various variables which limit supply of labour to agricultural sector.

1.8.1 Source of data

This research work exploits both primary and secondary source of data to come to a conclusion. Data collection was done in phased manner and includes two phases. In the first phase, various related study were reviewed so as to capture a detailed idea on various aspects of the problem to formulate the conceptual framework for the research. In the second phase primary data were collected using a well-structured questionnaire. Model of the questionnaire is given in the appendix.

Number of published and unpublished reports, text books, periodicals, seminar proceedings, commission reports and government publication were used for extracting secondary data. Besides these Website of NREGA, Ministry of Rural development and Govt. of Kerala were also used as the major source of secondary data. Secondary data collected were used as a base for hypothesis setting, sampling process and validating the information collected through primary source. Introduction 11

1.8.2 Tools used for survey

After discussing the problem with some statisticians, experts and officials of local bodies well-structured and quantifiable questionnaire was developed for collecting details from the MGNREGA workers. Questionnaire prepared for the workers enrolled into MGNREGA has three part first part comprises of questions related to demographic and personal profile of the respondents. Second part of the schedule has questions related to the changes in their work and personal life after enrolling into MGNREGA, and the last part has question related to problems and prospects of the scheme MGNREGS.

1.8.3 Survey area

This study mainly focuses on the situation prevailing Kozhikode District of Kerala state. Kozhikode district has second rank among various districts Kerala in the case of development. Economy of the district is mostly depended to gulf money but still a majority of the population depended to agriculture. 24 Panchayats of the district (two each from a Block) are selected for the study based on the implementation MGNREGS in the particular local body. A detailed description of Survey area is given in the below given table.

Table 1.1: Detailed Description of Survey Area District Blocks Panchayats Selected Balussery Koorachndu Unnikulam Chelannur Thalakkulathur Kakkodi Koduvally Kattippara Thiruvambadi Kozhikode Kadalundi Olavanna Kunnamangalam Karassery Kodiyathur Kunnummal Kavilumpara Maruthonkara Kozhikode Meladi Keezhariyur Thurayur Panthalayani Arikkulam Atholi Perambra Chakkittapara Kayanna Thodannur Maniyur Thiruvallur Tuneri Vanimel Tuneri Vadakara Eramala Onchiyam Introduction 12

1.8.4 Measurement variables

The concept and construct of the study are converted into pragmatically testable and apparent variables. It includes contradictory, categorical, unceasing and other unspecified set of variables.

1.9 Sampling Design

It consist the process of selecting samples from the population of workers registered under the scheme MGNREGA. Another section of population includes farmers from different part of Kozhikode district.

1.9.1 Population for the study

Workers registered under MGNREGA constitute the population or universe for this study. In this study researcher try to analyze impact of MGNRGS on agricultural labour supply of Kozhikode District, details from workers who are working under MGNRES in inevitable to conduct the study.

As per the statistics available in the MGNREGA website as 31st March 2014, 469052 persons are registered under MGNREGA in Kozhikode District. Among this 289614 are women, 46676 are SCs and 4512 are STs. Active workers of the district under this scheme is 197160. In Kozhikode district as per 2011 censes total 638351 farmers are there. In this 38749 belongs to SC community and 2317 belongs to ST community, balance 597285 belongs to a wide mix. 63% of the total farmers are marginal farmers holding less than 1 hector land; and .03% is producing in large scale and is holding more than 10 hector land.

1.9.2 Sample size

Population under the study is very large, workers registered under MGNREGA in Kozhikode district is the universe of this study. Since the population is very large, sample can be determined using the approach of Cochran (1963). The equation of this model is:

Introduction 13

Where, n is the sample size, Z2 means the abscissa of the normal curve that cuts off an area ∞ at the tail (1-∞ equal the desired confidence level), e is the desired level of precision, p is the estimated proportion of an attribute that is present in the population, and q is 1-p. The value of Z is found in statistical table which contain the area under the normal curve. In the present study, value of p assumes p=0.5 (maximum variability under normal distribution at a confidence level of 95% and 5% precision. The resulting sample size is 385. In this study for selecting equal number of samples form the sample frame, sample size is decided as 384 and 384 workers from 197160 active workers of MGNREGA were selected randomly for this study

1.9.3 Sample frame and selection of samples

In Kozhikode District there are 12 Blocks Panchyats, MGNREGS has been implemented in all the 12 Blocks. From each Blocks 2 Gram pachayat were selected based on judgment sampling, after observing the agricultural activity and area of cultivation. Panchayats having large area of agriculture land and active in farming were selected for the study. From each Panchayat, 2 wards were selected randomly and from each ward eight workers of MGNREGS were selected using simple random method.

1.10 Period of Reference

Information required for the study is highly sensitive and personal in nature as it consists personal information and data related to their earnings. Most of the workers and farmers were not ready to produce all the information. It was only possible through a well-designed and self-administered questionnaire. The survey conducted during 2015 November to 2016 March. Secondary data collected for the study was related to the period from 2006-07 to 2013-14. Introduction 14

1.11 Tools for Data Analysis

The scholar of research has used rigorous statistical techniques for extracting useful information from the raw data collected. Selected statistical tools were based on suitability to the defined objectives and the nature of data collected. The analytical methodology covered large number of statistical tool including parametric and non-parametric in nature.

Percentage analysis method is widely used in this study to know the extent of coverage of the programme and this method is suitable to assess the condition before and after the implementation of the scheme MGNREGA. Independent sample t test verified the statistical significance of difference in mean score of percentage of market wage rate increase before and after the introduction of MGNREGA. Simple correlation analysis was used to assess the relationship between increase in wage rate of MGNREGA and increase in market wage rate.

1.12 Limitations of the Study

1. Respondents were not fully cooperating while collecting data, since they are not technically capable to respond against some queries.

2. This research work is mostly based on primary data and the responses are not free from personal bias, it might have affected the results of the study.

3. Result of this research work is based on the study conducted among few selected workers and farmers of Kozhikode District.

4. Secondary data are collected from various published sources and used for the study, so the study may not be fully free from errors. Chapter II REVIEW OF LITERATURE

2.1 Introduction

The study of any research problem requires referring the past works on the related topics by other scholars which are directly connected to the objectives of the study. This helps to proceed with work in the right direction. It acts as a guide and facilitates, for conducting study and drawing conclusions in a systematic way. It assists in delineation of the objectives and research procedure to be followed.

Number of studies had been conducted at International level, National level and also at regional level on various aspects MGNREGA. Since it is first initiation from a nation all the agencies like World Bank, ILO, UN, RBI etc. were very eager to know the performance and impact of the scheme MGNREGS. Most of the studies make initiations to bring out the impact created by the NREGA programme on the earnings, social status and asset holdings of the rural women and other beneficiaries of the scheme. And some of them reveal the barriers to efficient implementation of the programme. MGNREGS in Kerala not providing direct labour for the agricultural sector in large scale. Since the agriculture is still considered as the bread and butter of a major portion of the population, a study which focuses on the impact MGNREGA on agricultural sector labour supply is very significant and relevant. Existing studies in this area are very few and providing very little information. A profitable review of the relevant studies has been briefly attempted below, and these listed studies justify the relevance and importance the present study.

2.2 Literature Review

Padhi (2007) mentioned that agricultural laborers in in India are usually very low paid, even when they undertake laborious task. Indian agricultural sector is still depended to monsoon and job opportunities are highly seasonal in nature. Agricultural laborers and their family are in the severe risk of poverty that permits routes out of agricultural labor, particularly across generations. Review of Literature 16

Jose and Gireeshan (2007) in his study on the impact of Mahatma Gandhi Rural Employment Guarantee Scheme in 37 Local Bodies in Wayanad and Palakkad District (two Districts where NREGA implemented in the initial phase) revealed that there was an active involvement of LSGs in programme planning and implementation. Several micro level institutions have been formed in all the local bodies for ensuring the smooth functioning of the scheme; but their sustainability has not been ensured. All most all Panchayats have completed registration of workers and issuance job card, they were not able to provide guaranteed number of employment to registered workers.

Dreze and Oldiges (2007) in their study mentioned that the anticipated benefits of employment guarantee started to show in the pioneer districts. The study reveals that the number of work days and expenditure on MGNREGS are very high in the financial year 2007-08 comparing to other financial years near to that. In 2006-07 MGNREGA generated 900 million work days, at a cost around Rs. 9000 crore. It is much below level that would materialize if the Act were implemented in letter and spirit. Best performing state was Rajasthan, produced around 100 work days per person. Thripura, Madhya Pradesh. Assam and Chhattisgrah also performed well. But Kerala was standing in the bottom level incase performance due to low demand for MGNREGS work in the state.

Rajalaxmi (2008) had a study in Anantapur District of Andhra Pradesh and the result says that 11 % of the total work forces are only skilled and most of the workers (99%) were not thinking to migrate from villages for work, because they have enough employment opportunities under NREGA in the previous year as well. The Study concluded that all most all the sample population would not like to migrate from their village even if they are likely to earn more in the urban areas. So the contribution of MGNREGA towards bringing down distress of migration to urban areas during the slack season is very valuable.

Mehrotra (2008), as a civil servant who had been a part of implementation of the scheme, believes that 4% of the project cost now allocated to administrative Review of Literature 17 purpose and professional support, it is still quite low. Programme like NREGA needs high level professional support. If 2% per year growth rate is to be observed in the agricultural sector, the rain fed areas that constitute 60% of agricultural cropped area in the country have to raise their land productivity; they have to move from one crop to preferably two; if not three crop per year.

Deshingkar (2008) revealed in his studies that human work force is the major constituent of input in agricultural cultivation, but in the standard of living of family who are earning from agricultural sector employment is very worse. So they are trying to migrate from one part of the country to some other places for earning a better livelihood. This situation creates more imbalances between demand and supply of agricultural sector laborers.

Vijay Kumar, CEO of SERP, Andhra Pradesh Government (2009), Suggest that implementation of NREGA should be linked with existing SHG groups. He also said that NREGA workers should get an insurance protection and they should get enrolled into a contributory pension scheme which provides a pension of Rs. 500 per month after attaining the age of 60.

Dr. C.P Joshi, Former Minister of Rural Development, Government of India, (2009) initiated a discussion session and explained the main issues of consideration and constrains in the implementation of NREGA, especially federal structure and distribution of responsibilities. He assigned a task to the participant of the discussion, to propose future interventions and suggestions on how to change unskilled NREGA participants to semi or skilled workers, how to develop the assets created under NREGA more lasting, how to bring NREGA workers under the coverage of proposed National Rural Livelihood Mission (NRLM) and to strengthen the process of social audit and creation of District Ombudsmen for grievance redressal.

Jayasree (2010) revealed in her studies that MGNREGS provides employment to those who demands employment and it is a special feature of this programme. In the initial phase it was introduced in 200 districts of the nation and Review of Literature 18 later extended to the whole country. Since most of the rural women mass are jobless this mission will help them to find enough days of employment.

Vanitha and Murthy (2011) conducted a research work on “Economic Analysis of MGNREG Pogramme in Mysore District of Karnataka” and found that 70 % of the workers enrolled to MGNREGA are agricultural laborers. Major portion of the Income earned by those who got registered under the scheme are from agricultural sector (60.55%). Average annual work days generated by the MGNREGA were 75 days and about 68 % of landless participants earned 28% of their house hold income from the scheme. Study also revealed that there has been a decline in the supply of labour to the extent of 41 person days per year on an average after implementing MGNREGS and suggest that works under the scheme should be executed only during offseason.

Ahuja (2011) initiated a research work in both agriculturally backward and agriculturally advanced districts of Haryana to know the impact MGNREGA on agricultural labor supply. Study indicates that, for the backward and area resource scarce areas, MGNREGS is good provider of employment. But in the case of developed districts the scheme couldn’t stop migration as the people were earning more income from migration.

Swaminathan and Ayar (2011) produced a report to the Ministry of Agriculture, Central Government of India, the report says that in the 36 months period (from January 2008 to December 2010) the agricultural wage in the country have increased at a growth rate between 42% (in Rajasthan) and 106% (in Andhra Pradesh). There was an exception also, in Gujarat the rate of growth was only 24%. They also pointed that the increase in agricultural wages has caused to reduce the stress of migration from rural to urban.

Murthy and Indumati (2011) conducted a study to know the economic impact of MGNREGA in the Drought-prone State of Karnataka, Rajasthan and Irrigation Dominated State of Andhra Pradesh. This study revealed that 50% of the Review of Literature 19 households who registered under the Act, actually demanded employment. This is due to the availability of favorable market outside the MGNREGA and outside the agriculture sector. Of the total number of households demanding employment, 92- 97 % were provided in the drought-prone states of Karnataka and Rajasthan, while for the irrigation dominated state of Andhra Pradesh, it was reported that 107%. This means that in Andhra Pradesh, MGNREGA is being offered even to those house hold who did not demand it.

Maheshwari and Gangwar (2011) went for a study on “Impact of Dairy Farmers in Thanjavur District of Tamil Nadu” and found that after the implementation of MGNREGA wage rate have significantly increased in the sector from Rs. 60 per day Rs. 110 per day. The study observed that animals of some landless or small dairy farmers are maintained by the children or aged family members, as majority of adult family members enrolled into MGNREGS. But the these workers are not getting guaranteed 100 days of employment in a financial year, more over wage payment and issue of job cards are also getting delayed always.

Prabhakar et al (2011) opined that world’s second largest country in the case of manpower is India, but all the sectors of the economy are facing scarcity of labor and the impact more is in agricultural sector. The 2001 Census has defined agricultural labor as “any person who worked on another person’s land only as laborer, without exercising any supervision in cultivation, for wage in cash or share such as share of produce”. Proportion of agricultural workers to the total work force has been declining over years. But the proportion of same in the secondary and tertiary sector is on rise. This has influenced the sector and some changes have noticed in agriculture in the recent years like, reduction in crop yield, reduction in cropping intensity and changes in traditional cropping pattern.

Harish et al (2011) made a research on Impact and Implications of MGNREGS on labor supply and income generation from Agriculture in Central Dry Review of Literature 20

Zone of Karnataka. This study results that the number of days of work in a year has increased to 206 in a significant manner along with the introduction of MGNREGS, reflecting an increase of 16%. Regression analysis of this research reveals that gender, education and family size of workers are important factors influencing the worker’s employment.

Channaveer et al (2011) had a study on “Impact of MGNREGA on Inputs- use Pattern, Labour Productivity and Returns of Selected Crops in Gulbarga District, Karnataka”. He was trying to examine the impact MGNREGA in the selected two sets of Villages in the Gulbarga District, one which utilized 75% of allocated fund and other utilized only 25% of fund under MGNREGA. Result of the study reveals that cost of cultivation of Red Gram and Rabi Jower found higher by 23% and 16% respectively in fully implemented villages. Labour productivity of male and female has been noticed lower in fully implemented villages, and implementation of the scheme has caused for the hike in wage rate of fully implemented MGNREGA villages.

Baba et al (2011) made an examination on “Scarcity of Agricultural Labor in Cold Arid Ladakh: Extent, Implications, Backward Bending and Coping Mechanism”. Result of the examination says that labor is a prominent input in the Indian agricultural sector. The phenomenon of underemployment is manifested in daily lives as a large proportion of labor demand is met by wage labor, due to the skewed land distribution and seasonality of demand in agriculture. But the agricultural laborers are not well placed to take advantages of this and mobility of agricultural labor remains low.

Kumar (2011) opined that the rural India is undergoing a quick transformation and the contribution of non- farming job and non-farming income to the rural income are also increasing. Researcher mentioned many studies on rural employment diversification in like, (Kumar, 2009; Mukhopadhya and Rajaraman, 2007; Chadha and Sahu, 2002; Basant and Kumar, 1989) to conclude that the share Review of Literature 21 of non- farm sector in rural employment has significantly grown over time. This study also revealed that there is an acute shortage of labor in Cuddalore District for agricultural work. If this situation continues, the cultivation pattern of the district may even get a shift towards tree crops like coconut, cashew etc. which are comparatively labor intensive. Reasons identified by the researcher for this shift are the low wage rate of locally available jobs and seasonal nature of agricultural sector jobs.

Alha and Yonzon (2011) revealed that there is an urgent need to implement MGNREGS and other projects with full potential to improve social and economic condition of the large population of agricultural workers who have been living in very pathetic situation for the last couple of decades. Their study further indicate that there was a decline in rate of migration from rural to urban between the period 2004-05 and 2007-08, may be due to the introduction of the supporting scheme MGNREGS.

Alha and Yonzon (2011) expressed that agricultural sector in India has number of characteristics like high supply of labor than demand, very low rate of wages, large area of agricultural land and opportunity to earn livelihood is very limited. But Sector has undergone for a huge change in recent couple of years. The reasons for this change are the increased rural to urban migration, and the introduction MGNREGS and other public works. Structural changes happened in Indian economy has caused for increased rate of male migration from rural area to urban expecting a better earning. Schemes like MGNREGS not attracted them because of the market wage rate, but these schemes are found attractive for females in rural locations. This situation results in a shortage of farm labor and consequently, an upward push in agricultural wages.

Verma and Shah (2012) conducted a study to assess the potential of various irrigation assets constructed in connection with MGNREGS in Bihar, Gujarat, Rajasthan and Kerala for the year 2009-10. Study was based on the cost benefit Review of Literature 22 analysis and finds that 80% of the assets created recovered its investment in the first year itself.

Thadathil and Mohandas (2012) found in their studies that MGNREGS had worthy impact on the cultivation of Wayanad when it introduced in the year 2006. During this time District was facing severe crisis in the agricultural sector, many farmers committed suicide due to loss happened to them, as a result low prices for their products. Workers lost their employment and those who had job were very low paid, nearly Rs.100/day for male workers and Rs.70/day for female workers. This situation has caused for the massive flow of laborers from agricultural sector to MGNREGS when the scheme is introduced. Later when the market wage rate increased to considerable amount male workers started to leave the scheme and shifted back to their earlier occupation.

Azam (2012) examines the impact of MGNREGA on labour force participation and on participation public work. This was one of the first papers to use the phase wise roll out of the MGNREGA to identify the causal impacts using a DID estimator. He finds a positive impact of the scheme on labour force participation, and also notes that this was driven mainly through an increase in female participation. He also finds an increase in participation in public works in Phase 1 and 2 districts, but the magnitude is modest.

Zimmermann (2013) has conducted a study to examine the impact of MGNREGA on private casual wage employment utilizing unit record data for 2007- 08 adopting a regression discontinuity approach. Finding of this study suggest that MGNREGA has a significant impact on public work employment and also finds evidence that suggests that people moved out of private casual employment into self-employment due to the MGNREGA.

Roopa and Leelavathi (2013) mentioned in their studies that Indian agricultural sector is often cited as a classic example for disguised unemployment. Labor abundance, low rate of wages, and need for creation of other employment Review of Literature 23 opportunities for a large number of work force have always been the central issues of debate throughout the planning period. The study reveals that MGNREGA must be implemented in partnership with local farmers in such a way that the local farmers will gain labor supply through MGNREGS, and the state can also share the fiscal burden with the local farmers in season of corps. In the off season work force should be directed to the development of local infrastructure and other related asset creation.

Indian Institute of Science (2013) undertook a study to know the ground water level of different states in India after implementing various plans under MGNREGA to increase ground water level. Study finds a significant improvement in ground water level and irrigation facilities for farmers as a consequence of MGNREGA in Andhra Pradesh, Karnataka, Madhya Pradesh and Rajasthan.

Sardaprasad (2014) in his study titled, MGREGA: A strategy to overcome labor shortage in agriculture has observed that the main four reasons for agricultural labour shortage in the rural area are rural out migration, MGNREGA work and it wage rate, disinterest of rural youth in agriculture, and political influence of leader on labour. According to him, the most affected farmers are the medium and large scale farmers, because they are not able to manage agriculture only with the help of family labor and most of the time they are not able to hire labor because of the unavailability, even if they are ready to pay higher wage rate.

IFPRI (2014) in its discussion paper revealed that after the introduction of MGNREGA income of rural poor are increased into a considerable amount, village infrastructure and agricultural sector wages are also improved. Study also finds that water saving technology in the rural area is also being affected. In the long run MGNREGA will be useful for increase in agricultural productivity and the newly created MGNREGA infrastructure will help to increase the market access also.

Seenath P, Prema and Sulaja O R (2015) conducted a study on “Implications of MGNREGA in Agricultural Labour Market” and found that majority of the Review of Literature 24 workers registered under this scheme are females and their participation will come around 95%. Agriculture was the major provider of employment in Kerala before the introduction MGNREGA, but after its implementation MGNREGS took this position. Though they were not completely abstaining from agricultural work, their participation in terms of agricultural labor per year was decreased from 64.4 to 20.4 in Kasaragod District of Kerala. Study shows that there was 68.42% reduction in average agricultural labour days per year after implementing MGNREGA. This change indicates that MGNREGS is the supplementary provider of employment in Kasaragod District. Annual income of the participants of the scheme was increased by 142% after joining into the scheme.

Chowadary (2015) conducted a study and revealed that during the introduction stage of MGNREGA there was massive flow of workers from agricultural sector to MGNREGS because of its high wage rate. Then the situation changed and the agricultural sector recovered its old status. The higher market wage rate has resulted in opposite flow of workers back to their basic occupation. Those who had retired from plantations and sought a work of lesser effort remained there. Women constitute a major portion of workforce of MGNREGS, because women got wage equivalent to a male worker and it is a matter of status to them to be a Government worker rather than a coolie. Women who were mainly housewives and laborers of higher age group resorted to MGNREGS as it involves less toil and provides guaranteed employment.

FICCI and KPMG (2015) in their report titled “Labor in Indian Agriculture: A growing Challenge” says that Mahatma Gandhi National Rural Employment Act, have affected farm labor adversely and can have negative impact on productivity and prices. The decrease in supply of agriculture labor with support of various Govt. schemes like MGNREGA has caused for the escalation in farm wages. This has an adverse impact on the profitability of the farmers. This report also says that between 2004-2005 and 2011-2012, farm labor declined 31 million, even if the total work force continued rising. Share of farm work force in total work force of the country decline from 57% to 49%. Review of Literature 25

2.3 Summary

Labour force constitutes a vital input in Indian agricultural sector. Last couple of decades’ agricultural sector of India has been characterized by supply of labour which is always higher than the demand in the sector. Majority of the workers in this field are unskilled and are working for a very limited income. Another characteristic is the seasonal nature of its employment since the agriculture in India is still depending on monsoon. Rate of migration of workers from rural to urban area was also very high by expecting a better livelihood; migration is very high in the case of male workers. Sectorial changes happened in India economy has influenced agricultural sector also, a considerable portion of work force have moved to non-farm sector. Further the share of non-farm sector in rural employment has considerably grown over time. MGNREGA have great impact on Indian economy, especially on agriculture and its labour force. Implementation of the scheme influenced rural to urban migration and the rate of migration has declined up to a large extent. In many of the state the scheme has caused for the increase in agricultural sector where the general market wage rate was very high. Many of the studies reveal that the programme has a negative impact on availability of labor for agriculture, in most of the state wage of farming is less than the rate offered by MGNREGA and the workers preferred MGNREGA instead of farming. Further, some of the researchers have mentioned that MGNREGS is more attractive for females and senior people as the program is providing opportunities to those who demand work and also useful to improve the natural resources like and land and water. Chapter III

RURAL EMPLOYMENT GUARANTEE SCHEMES IN INDIA

- AN OVERVIEW

3.1 Introduction

Poverty in India was severe and most acute in rural areas where there was greater dependence on the agricultural sector. The first year of the planning era of the country (1951-52) witnessed a poverty ratio of 47.4 per cent in the rural areas and 35.5 per cent in the urban India (Planning Commission, 2002). A significant majority of the poor in rural areas were depending mainly on the irregular wages, they could earn through unskilled labor. Unemployment was not considered as a bigger issue by the Central Government and Government expects that a relatively faster economic growth through the Five Year Plans would generate enough employment opportunities for the unemployed masses. Moreover, a relatively less moderate increase in the labor force was expected by the Government at that time. However, the situation became quite serious by the end of the Second Five Year Plan in 1961. The number of the unemployed increased from 42.6 lakh in 1956 to 64.8 lakh in 1961, showing an increase of 52.11 per cent over the said period (Census of India: Variation in Population Since 1901, 2001-02). Efforts were then taken by the Government to make development more employment-oriented, by encouraging the growth of employment intensive sectors and by instituting special wage employment programmes. REGS in India – An Overview 27

Table 3.1: Employment Growth in India (in Millions)

Rural Urban Total Year Number Growth %* Number Growth %* Number Growth %# 1972-73 168.65 - 36.10 - 204.75 - 1977-78 171.04 0.28 42.85 3.74 213.88 0.92 1982-83 187.90 1.97 51.59 4.08 239.49 2.08 1993-94 238.75 2.46 75.18 4.16 313.93 2.61 1999-00 251.22 0.87 86.97 2.61 338.19 1.25 2004-05 277.6 2.10 105.2 4.19 382.8 2.62 2009-10 285.4 0.56 115.4 1.94 400.8 0.92 *Simple average of previous year #Growth rate (%) per annum is given over the previous quinquennnial round Source: Planning Commission of India

Table 3.2: Growth of Unemployment in India

Unemployment Sl. No. Year Change (+/-) (% to labour force) 1 1972-73 8.35 - 2 1977-78 8.18 -0.17 3 1982-83 9.22 1.04 4 1993-94 6.06 -3.16 5 1999-00 7.31 1.25 6 2004-05 8.28 0.97 7 2009-10 6.53 -1.75 Source: Planning Commission of India

“India lives in its villages”. This was the statement of Mahatma Gandhi, the Father of our nation, and is relevant even today from the political, social and economic perspectives of India. As per the Census 2011, Indian population is 121.02 crore, of which 68.84 per cent (83.31 crores) live in the rural areas and only 31.16 per cent (37.71 crores) are in the urban area (Registrar General & Census Commissioner, 2012). Rural life in India is characterized by poverty, REGS in India – An Overview 28 unemployment, as well as poor and inadequate infrastructure, and these will have a cascading effect on urban centers by causing slums and economic and social tension. Hence, the development of rural areas received more attention by way of the various schemes designed for the development of Indian economy. The unemployment scenario in the country over the years is quite a substantial evidence of rural backwardness and all sorts of developmental needs. The increase in unemployment has been a silent phenomenon in India. According to the National Sample Survey’s (NSSO) 55th round, unemployment as a percentage of labour force rose from 5.99 per cent in 1993-’94 to 7.32 per cent in 1999-2000 (Government of India, 2012). Based on the National Sample Survey, the International Labour Organisation has reported that the total employment grew by only 1.1 million, from 2004-05 to 2009-10. However, the total employment in India expanded by 13.9 million from 2009-10 to 2011-12. As per the report on the ‘Third Annual Employment and Unemployment Survey, the unemployment rate is estimated to be 4.7 per cent at the all India level (Govt. of India, 2013). Despite relatively low labour force participation rate, the unemployment rate is significantly higher among females as compared to that among males. At the all India level, the female unemployment rate is 7.2 per cent whereas for males, the rate is 4.0 per cent. It should be noted that the unemployment rate is lower (4.4 per cent) in rural areas whereas, in urban areas, the same is 5.7 per cent (Govt. of India, 2013).

To a great extent, the size of employment in a country depends on the level of development. So, when a country makes progress and its production expands, the employment opportunities also grow. In India, during the past three decades, production has increased in all sectors of the economy, which has led to an increase in the level of employment. As against the GDP growth at an average rate of 6.4 per cent between 1992-93 to 2000-’01, the employment growth declined from 2 per cent to 1 per cent (Sengupta, 2004). Thus, the country has been witnessing a jobless growth in the recent years. This was due to the fact that the rate of economic growth was lower than the targeted rate and so, adequate number of jobs was not created REGS in India – An Overview 29

(Puri & Misra, 2008). It is also argued that economic growth in India in the early 2000s had not led to much employment generation (Chandrasekhar, 2004). The overall employment growth story of the country during the last two decades was not appreciable as it declined slightly over the two decades (Raveendran, 2007). This was particularly true for rural areas while urban areas maintained a better annual growth rate (Table 3.1). The percentage of unemployed to total labour force in the country is given in Table (3.2).

3.2 Employment Generating Programmes Implemented in India

Basic Objective of the development planning India is “growth with social justice” since independence. Existence of poverty and unemployment is considered as the most serious issues against the development. This situation forced the governments to give special emphasis on schemes providing additional employment opportunities and various special schemes for generating- both self-employment and wage employment. Some major initiatives in this side are listed below.

3.2.1 Self-employment programmes in India

As per the 55th round of the National Sample Survey (NSS) on Employment and Unemployment in India 1999-2000, 55 per cent of the employed males and 57 per cent of the employed females in the rural areas were self-employed persons. At the same time, only 9 per cent of the employed males and 3 per cent of employed females were regular employees (Government of India, 2012). The Planning Commission for the 10th Five year Plan had pointed out that about 36 to 40 per cent of the rural population still required casual/wage employment. Obviously, programmes for self-employment of the poor have been an important component of the anti-poverty programmes implemented through government initiatives in rural India. A review of the various self-employment programmes implemented in the country is mentioned below.

1. Integrated Rural Development Programme (IRDP): IRDP was central Government sponsored self –employment scheme introduced in all Blocks of the REGS in India – An Overview 30 country in 1980 during Sixth Five year plan. Scheme was introduced as cost sharing base in the ratio of 50:50 by State and Central Governments. Central funds were allocated to state in the ratio of number of rural poor in the state to the total rural poor in the country. The programme intended to provide self-employment in activities like sericulture, animal husbandry and land based activities in the primary sector. Targeted groups of beneficiaries of IRDP include small and marginal farmers, agricultural laborers, rural artisans living below the poverty line, SC/ST families and physically challenged persons. Another outstanding feature of IRDP was that there was an assured coverage of 50% SC/ST families, 40% women and 3 % physically handicapped persons.

Table 3.3: Details of Assistance Granted and Beneficiaries of IRDP

Total Investment in lakh (Rs.) No. families Plans Subsidy Credit Assisted in lakh Total Released Given Sixth Plan 165.62 166118 310160 476278 Seventh plan 181.77 270802 537254 808056 Annual Plan 1990-91 28.98 66816 119002 185818 Annual Plan 1991-92 25.37 65774 114733 180507 Eighth Plan 108.36 397495 756630 1154125 Ninth Plan 33.84 174473 417071 591544 Total 543.94 1141478 2254850 3396328 Source: Planning Commission of India

IRDP was very successful in eradicating rural poverty in India to a certain extent, but along with the growth of Indian economy serious criticism were raised from various corners against the performance of the programme and recovery of debt. As per the report of Planning Commission of India only 41% of the debt was recovered as on March 1996. It also affected badly on health of the Indian Lending financial Institutions due to high rate NPA. On 1st April 1999 Central Government of India merged the Scheme with Swarnajayanti Gram Swarozgar Yojana (SGSY) REGS in India – An Overview 31

2. The Scheme for Training Rural Youths for Self Employment (TRYSEM): The scheme was introduced in August 1979 as an allied programme to strengthen IRDP. Main objective of the programme was to train about 2 lakh rural youths to make them able to do self-employment. 40 youths from each Block who belong to rural family having annual income less than 3500 per annum were selected for training under this scheme. The scheme was highly successful in generating self- employment opportunities for rural youths. Along with IRDP TRYSEM also merged into Swarnajanti Gram Swarozgar Yojana (SGSY) in 1999. Details of performance of this scheme is presented below

Table 3.4: Details of Assistance given and Performance of TRYSEM

Fund Fund No. of No. of % of trained Plans Alloted (Rs. released youths Youths youths in lakhs) (Rs.in lakhs) trained Employed employed 6th Plan 387.90 NA 10.148 5.803 57.2 7th Plan 12884.71 NA 9.977 5.952 59.6 1991-91* 326.93 NA 2.360 1.651 70.0 1991-92* 4879.31 NA 3.071 1.675 54.5 8th Plan 35563.70 37007.43 15.273 7.522 49.3 9th Plan 13284.83 15503.4 4.739 2.18 46.01 Total 70261.379 52560.83 45.568 24.783 54.4 *Annual plans Source: Planning Commission of India

3. Development of Women and Child in Rural Areas (DWCRA): DWCRA was introduced in September 1982, in 50 Districts in India on a test basis on account of the lesser provision and benefit for women under IRDP. The basic objective of DWCRA was to provide necessary support to woman to enable them to take up income generating activities. Assistance was given individually or to organized groups of women. Under the scheme, women were granted assistance to take up viable economic activities with Rs. 15,000 as a one-time grant to be used as a REGS in India – An Overview 32 revolving fund. DWCRA includes both central and state assistance. The assistance from UNICEF also made available to the extent of Rs. 5.40 crore. Assistances were granted to huge number of individuals and group under this programme. The DWCRA was merged into Swarnajayanti Gram Swarozgar Yojana (SGSY) in 1999. Details of Central Assistance, Financial support given under the scheme and no of beneficiaries are depicted below.

Table 3.5: Financial Details of DWCRA

Central Assistance Expenditure No. of Women Plans (Rs. in lakhs) (Rs.in lakhs) Benefited 6th Plan 298.52 - 52170 7th Plan 3663.52 3099.02 469704 1991-91* 898.00 500.67 109557 1991-92* 962.73 784.19 208012 8th Plan 19074.18 22453.78 2268327 9th Plan 14093.23 15411.25 1036932 Total 38990.18 42248.86 4144705 *Annual plans Source: Planning Commission of India

4. Supply of Improves Toolkits to Rural Artisans (SITRA): This programme was introduced in July 1992 to provide improved tool kits for rural artisans all over the country at 90% subsidy. Key objectives of this programme were ensuring increased income, improved quality of life, enhanced production and reduction of migration from rural to urban. The scheme aims at supply of a kit of improved hand tools with a financial ceiling Rs.2000, for which beneficiaries need to pay only 10%. Scheme was later merged with Swarnjayanti Gram Swarozgar Yojana (SGSY) in 1999. Financial analysis of the scheme is given below. REGS in India – An Overview 33

Table 3.6: Financial Analysis of SITRA

Fund Allotted Expenditure Beneficiaries Plan Year (Rs. In crores) (Rs. In crores) (no. in lakhs) 1992-93 16.86 13.87 0.84 1993-94 23.23 16.60 1.08 Eighth Five year Plan 1994-95 29.00 22.90 1.26 1995-96 40.00 28.69 1.55 1996-97 40.00 36.02 1.80 1997-98 30.83 34.28 1.63 Annual Plans 1998-99 59.51 55.56 2.47 Total 239.33 209.92 10.61 Source: Planning Commission of India

5. Ganga Kalyan Yojana (GKY): As a sub scheme of IRDP Ganga Kalyan Yojana was introduced in the financial year 1996-97, this programme focuses on irrigation requirements of small and marginal famers of the country. Central Government released the fund in March 1997 and only Rs. 1093.545 lakhs were utilized during the financial year 1997-98. Programme reached to 6142 individuals and 1536 groups of the country, provision for wells and tube wells were allotted to them. Due to some administrative issues scheme was discontinued from 1998-1999 and unutilized funds were pooled with Swarnajayanti Gram Swarozgar Yojana (SGSY) from 1.4.1999 onwards.

6. Million Wells Scheme (MWS): This scheme was introduced in the year 1988-89 by The Ministry of Rural Areas and Employment (MRAE). The main objective of this scheme was to provide open wells free of cost to poor SC/ST farmers. If such wells were not feasible, the amounts allotted were permitted to utilize for minor irrigation projects. The beneficiaries had to undertake the construction of well. So the scheme was helpful to create both employment and capital assets. Below given table shows the performance of this scheme. REGS in India – An Overview 34

Table 3.7: Performance Analysis of MWS

Total Fund Allotted Expenditure No. of Wells Plan (Rs. In Crores) (Rs. In Crores) Constructed 7th Plan 271.43 241.16 137978 1990-91* 524.34 279.74 56434 1991-92* 524.634 495.19 172327 8th Plan 3727.44 2990.59 743031 9th Plan (1997-99) 1120.17 969.95 198663 Total 6168.32 4976.63 1308433 *Annual Plans Source: Planning Commission of India

7. Swarnjayanti Gram Swarozgar Yojana (SGSY): This programme was a key self-employment scheme to bring the poor rural families (swarozgaris) to APL categories. Objective of this programme was to provide income generating assets with the support of Bank credit and Government subsidy. Assumption of the government while introducing this scheme was that the rural poor had competencies of producing valuable goods and services, if they were given the right support and assistance by the Government. It was launched in April 1999, by merging various rural development programmes like IRDP, TRYSEM, DWCRA, SITRA, GKY and MWS. This scheme was introduced by the District Rural Development Agencies (DRDAs) with the active involvement of local bodies, banks, State Government and NGOs. The fund for the operation of the programme was shared between Centre and State in the ration 75:25. SGSY covered all corners of self-employment such as selection of key activities, planning of activity clusters, organization of poor into Self Help Groups (SHGs) having 10-15 members, and building their capabilities through social mobilization, training and skill development, generation of infrastructure, technical and marketing support.

The programme covered all aspects of self-employment such as selection of key activities, planning of activity clusters, organization of the poor into Self Help Groups (SHGs) having 10-15 members, and building their capacities through social REGS in India – An Overview 35 mobilization, training and skill development, creation of infrastructure, provision of technology and marketing support, etc

As per the guidelines, the SHGs had to open an account in a nearby bank to get the loan from that the bank and also to deposit the fund raised by them in the bank. The SHGs would receive a revolving fund of Rs. 25,000 from banks as cash credit facility. Of this, Rs. 10,000 would give to the bank by the DRDA and the banks were to charge interest only on the sum exceeding Rs. 10,000. The subsidy allowed under the programme was uniform at the rate 30 per cent of the project cost, subject to a maximum of Rs.7500 per individual Swarozgari, 50 per cent of the project cost subject to a maximum of Rs.10000 in the case of STs & SCs and disabled Swarojgaris, 50 per cent of the cost of the scheme subject to a ceiling of Rs.1.25 lakh for group projects. The monetary ceiling on subsidy was not applicable to irrigation projects. Detailed Report of the programme are given in the below table.

Table 3.8: Expenditure and Benefits Details of SGSY

Total Fund Total Fund SHGs No. of Plan Year Allotted Utilised Formed Beneficiaries (in crores) (in crores) (in lakhs) (in lakhs) 1999-00 1962.01 959.86 2.92 933868 9th Plan 2000-01 1608.18 1117.94 2.23 1006152 (last 3 years) 2001-02 1299.55 970.32 4.35 937468 2002-03 1178.22 921.11 3.99 826267 2003-04 1214.88 1043.43 3.92 896895 10th Plan 2004-05 1511.2 1290.83 2.66 1115928 2005-06 1558.53 1338.78 2.76 1151116 2006-07 1724.55 1424.20 2.46 1691926 2007-08 2394.17 1965.97 3.07 1699295 th 11 Plan 2008-09 3003.05 2285.39 5.64 1861857 (first four years) 2009-10 3495.65 2779.19 3.89 2085177 2010-11 3752.21 2804.04 3.11 2109986 Total 24702.2 18901.0 37.07 16315953 Source: Planning Commission of India REGS in India – An Overview 36

After the 11th plan Ministry of Rural Development observed various issues with SGSY like poor administration and management of the scheme, inadequate banking staffs and higher rate non repayment of loans. Since 2011 SGSY has been renamed as National Rural Livelihood Mission (NRLM). NLRM is designed as a demand driven scheme. State Government can formulate own poverty eradication projects based on their past experience, resources and skill base.

3.3 Wage Employment Programmes in India

Development planning of India was always characterized by poverty eradication since the starting of planning process in India in 1951. Wage employment programmes are the key ingredients poverty alleviation schemes. Wage employment programmes were intended to provide employment not only during agriculture season but also in times of natural calamities like flood, droughts etc. These schemes provide assistance to create community assets like village ponds, schools, rural roads etc. A brief discussion of the series of wage employment programme for rural poor launched by the Central Government of India is given below.

1. Rural Manpower Programmes (RMP): It was first among the various wage programmes introduced in India and was launched in 1960-61. Main objective of the programme was to provide 100 days of employment to at-least 2.5 million people by the last year of third plan. In the starting stage it was introduced in 32 community development blocks on a test basis then extended to 1000 blocks by the end of 1964-65. The programme closed in the year 1968-69 after generating 137 million man-days of employment.

2. Rural Work Programme (RWP): Central Government of India after evaluating the causes of failure of the RMP, decided to revise it as RWP. This scheme started in the year 1970-71 and aimed to generate 100 days employment for 1 lakh people during the first year, and 2.5 million persons by the end of the fourth plan. Growth rate of the scheme was very slow due to resource constraints and the programme failed to achieve even its lower target. REGS in India – An Overview 37

3. Crash Scheme for Rural Employment (CSRE): It was introduced in 1971-72 with double edged objective of direct employment generation and creation of durable assets like roads, culverts, soil conservation etc. The programme was expecting to crate 2.5 lakh man-days per annum in each district. The implementation of the scheme was under the control of State Governments even the full financial support was from Central Government. This scheme was also not reached the expectation due to bad implementation and supervision from the side of State Governments.

4. Pilot Intensive Rural Employment Programme (PIREP): Experience from the implementation of RMP and CSRE, lead to the realization that more concentrated efforts were needed to have considerable impact of the employment generation schemes. PIREP was started in November 1972 in selected 15 Community Development Blocks for a three year period. The main objective of the scheme was to provide opportunity to unskilled labor and creation of assets. The project completed its full term of three years and generated 18.16 million man days of employment.

5. Small Farmers Development Agency Programme (SFDA): This programme started operation in the year 1971 with coverage of 1818 Blocks in the country. The scheme aimed to increase the income level of identified small and marginal farmers and agricultural laborers. Assistance was given to work like minor irrigation, dairying, horticulture etc. through Community Development Blocks. The programme was not so successful due to its low coverage and the main reasons for this were the progressive erosion in the integrated functioning of the Block agency, inadequacies of the participating credit institutions, and lack of coordination and adequate support from the departments concerned. The programme was merged with IRDP in 1980.

6. Food for Work Programme (FWP): By introducing this scheme Government of India aimed to provide wage of employment fully or partly in food grains. This REGS in India – An Overview 38 scheme was introduced for generating additional employment opportunities for men and women in rural areas and to create durable community assets. By 1978-79 this scheme was able to create 372.8 million man-days of employment utilizing 12 lakh tons of food grains. Due to administrative and operational issues Government decided to revamp and restructure the programme and it was renamed as National Rural Employment Programme in October 1980.

7. National Rural Employment Programme (NREP): NREP was implemented to help rural population mainly depending on wage employment by providing additional gainful employment during lean agricultural periods. The objective of the scheme was to create durable commodity assets and raising the nutritional standard of the rural poor. It was centrally sponsored scheme implemented in April 1981, but the financial burden was shared between State and Centre on 50:50 bases. This programme created 1477.53 million man days of employment with an expenditure of Rs.2939.87 crore. On 1st April 1989, the scheme was merged into Jawahar Rozga Yojana.

8. Rural Landless Employment Guarantee Programme (RLEGP): RLEGP was introduced on 15th August 1983 with an expectation of expanding employment opportunities for the rural landless. The programme intended to provide employment to at-least one member of every landless household at a maximum of 100 days in a year. This scheme focuses on creating durable assets for enhancing rural infrastructure so as to create employment opportunities for the rural landless. Scheme was fully financed by the Central Government and implemented through the state governments.

9. Employment Assurance Scheme (EAS): This scheme was launched in identified 1778 backward Blocks situated in drought prone, desert, tribal and hilly areas on 2nd October 1993. The objective of the scheme was to provide 100 days assured casual manual employment during lean agriculture season. The scheme was REGS in India – An Overview 39 available to a maximum of 2 members from a family in the age group 18 to 60 years. EAS was demand driven scheme with 75% Central assistance. The programme was merged into SGRY from September 2001.

10. Jawahar Rozgar Yojana (JRY): JRY was started on 1st April 1989 by merging two wage employment programmes NREP and RLEGP. It was a Centre sponsored scheme with a cost sharing basis of 80:20 between Centre and State. Objectives of the scheme were to provide sustained employment to rural poor by strengthening rural economic infrastructure and assets. Priority was given to enhancement of productivity of land. People belongs to BPL category were the target group of this scheme. 22.5 % of the annual allocation was reserved to SC/ST category and another 30% was reserved for women. Initially, the JRY also included the Indira Awas Yojana (IAY) and the Million Well Scheme (MWS). Both these schemes were made into independent schemes in 1996. JRY had been restructured and renamed as JGSY with effect from April 1999.

11. Jawaha Gram Samriddhi Yojana (JGSY): This scheme was implemented on 1st April 1999 to ensure improved quality of life of rural poor by providing them additional employment. Primary objective of this scheme was to create infrastructure and durable assets at the village level to ensure sustained employment. Gram Sabhas were the approval authority of the various schemes under this programme. It was implemented as a Centre sponsored scheme on cost sharing basis between Centre and State in the ratio of 75:25. Fund allocation for the scheme was very less and only 6227.04 man- days of employment could be generated under JGSY. Later the scheme was merged into SGRY during September 2001.

12. Sampoorna Grameen Rojgar Yojana (SGRY): Central Government of India announced a new scheme on 25th September 2001 called SGRY to provide importance for additional wage employment, infrastructural development, food security and improving nutritional level in rural areas. Initial provision for the REGS in India – An Overview 40 scheme was Rs.10000 crore and 50 lakh tonnes of food grains costing 5000 crore was also provided at free of cost. Programme was open to all rural poor who were in need of wage employment and ready to do manual and unskilled work in and around their village. This scheme was introduced through Panchayati Raj institutions. Scheme was merged into MGNREGA from April 2008 onwards.

3.4 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

By the end of 2005 Indian economy had completed 50 years of the planning era, but condition of rural poor could not be improved to the expected level. A detailed analysis of the statistics shows that population included in the BPL category declined from 45% to 26 % by the year 2004-2005 and the rural poverty rate had declined from 47 % in 1951-52 to 28 %. Unemployment rate of rural population in India was always kept lower digits but the high rate rural poverty was a burning issue before the policy makers. All the employment generating programmes in India Implemented till 2005 were either discontinued or merged with other programmes as they could not create the expected results in employment generation and poverty eradication.

In this confusing situation United Progressive Alliance (UPA) led Government decided to bring a new demand based programme for the rural mass by introducing National Rural Employment Guarantee Act in Indian Parliament during September 2005. The Act was renamed as Mahatma Gandhi national Rural Employment Guarantee Act (MGNREGA) in 2009. Initially the scheme was implemented in 200 backward District of the country and decided to cover all the rural Districts of the country with in a period of five years, but it actually took only 3 years to cover the entire nation. Below given table explains the three phases of MGNREGA implementation. REGS in India – An Overview 41

Table 3.9: Phases of MGNREGA Implementation

Year Districts Covered 2006 200 Districts 2007 Another 130 Districts 2008 Balance Districts Source: MGNREGA website

In 2005 3.8 crore households were registered under the scheme and the number of registration reached 13.14 crore by the year 2013-2014. By the end of 2014 1646 crore person days of employment were generated under the scheme. MGNREGA guaranteed 100 day of employment to each rural family in a year, but the average number of person days generated during the 9 year period was only 46 days. Below Given table explains implementation phases of MGNREGA in Kerala.

Table 3.10 Implementation Process in Kerala

Year District Covered 2006 Palakkad and Wayanad 2007 Idukki and Kasaragod 2008 Other 10 Districts Source: MGNREGA website

In Kerala 2.14 lakh household were enrolled onto MGNREGS during 2006- 2007 and it has been increased to 28.13 lakh by the end of 2013-2014. In 2006-2007 scheme provided employment for 99000 households and in 2013-14 the number increased to 15 lakh

Obviously, as a result of the various programmes implemented by the Government from 1960-61 to generate employment and to reduce rural poverty, the proportion of the people living below the poverty line has been declining over the years. Poverty seems to have declined faster in the last five years due to greater emphasis on employment programmes in rural areas, combined with creation and strengthening of common property resources. But, still, about 30 per cent of the REGS in India – An Overview 42 population of the country living below the poverty line. The higher incidence poverty existing in the country signifies the necessity of programmes like MGNREGA to narrow down poverty and to improve the living standard of the rural community.

Table 3.11: Steps of Indian Journey towards MGNREGA (1952-2009)

Sl. Scheme/ Act Date/ Year No. 1 Community Development Programme(CDP) 1952 2 Rural Manpower Programme (RMP) 1960-61 3 Crash Scheme for Rural Employment (CSRE) 1971-72 4 Pilot Intensive Rural Employment Programme (PIREP) 1972 5 Marginal Farmers and Agriculture Labour Scheme (MFAL) 1973-76 6 Drought-Prone Area Programme (DPAP) 1973-76 7 Small Farmers Development Agency (SFDA) 1974 8 Twenty Point Programme (TPP) 1975 9 Food for Work Programme (FWP) 1977 10 Training Rural Youth for Self-Employment (TRYSEM) 1979 11 Integrated Rural Development Programme (IRDP) 1980 12 National Rural Employment Programme (NREP) 1981 13 Rural landless Employment Guarantee Programme (RLEGP) 1983 14 Jawahar Rozgar Yojana (JRY) 1989-94 15 Swarnajayanthi Gram Swarozgar Yojana (SGSY) 1999-2000 16 Sampoorna Grameen Rozgar Yojana (SGRY) 2001 17 National Food for Work Programmed (NFFWP) 2004 18 Notification of NREGA 1st Sept. 2005 19 Implementation of NRGA in 200 Districts 2nd Feb. 2006 20 Extended NREGA to additional 130 Districts 2007 21 Extended NREGA to all the Districts in India 1st April 2008 22 NREGA renamed as MGNREGA 2nd Oct. 2009 Source: Planning Commission REGS in India – An Overview 43

3.4.1 Objectives of MGNREGA

The National Rural Employment Guarantee Act was approved by Indian Parliament in its monsoon session on 5th September 2005. It was within a year of formation of first UPA Government and marked has fulfillment their election promise. The Act currently have a vide coverage over all 645 rural districts of India. Act aimed to enhance standard of living of India rural population by providing at least 100 days of wage employment to rural adult households who are willing do unskilled manual work. Primary objective of the Act was to ensuring livelihood security on Indian rural mass by guaranteeing 100 days of wage employment in a financial year. The NREGA Act itself outlines the primary objective of the Act as-

“An Act to provide for the enhancement of livelihood security of the households in rural areas of the country by providing at least 100 days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work and for matters connected herewith or incidental thereto”

The Ministry of Rural Development (MoRD) in 2014 outlined the other objectives of the Act, which include:

 Creation of productive assets both of prescribed quality and durability by providing wage employment.

 To support the entire community by creating employment, enhancing agricultural productivity and increasing natural resources.

 Proving strong social safety wall for the vulnerable group like women, Scheduled Tribe and Scheduled Cast by providing a fall-back employment source.

 Strengthening Natural Resource Management (NRM) through works that address causes of chronic poverty like droughts, deforestation and soil erosion to ensure sustainable development.

 Empowering rural mass of India through the process of right based law. REGS in India – An Overview 44

 Strengthening grass root process of democracy and infusing transparency and accountability in governance.

3.4.2 The Salient design features of MGNREGA

For reaching the desired objectives, MGNREGA has several design features which were not included in the other wage employment schemes implemented earlier. India has a long history of public-works based wage employment guarantee programs and its experiments with them dates back to the 1980s. Outstanding features over its predecessors are outlined below.

. The entire wage guarantee scheme before MGNREGA had their beginnings in an executive orders, NREGA is an Act enacted in Indian Parliament, and so it has both legal superiority and constitutional approval.

. The Act is irrevocable and can be dismissed only by another Act of Parliament.

. The Act has multiple objectives like providing minimum livelihood security, development of rural infrastructure etc. So it is not only a work based employment programme.

. The basic thrust of the Act is entitlement and it provides provisions for minimum wages, appropriate worksite facilities and ensures at least 1/3 of female participation.

. It is a first of its kind experiment on partially decentralised planning, implementation and monitoring of programme through the Panchayati Raj Institutions (PRIs) across the state.

Other key features of the Act MGNREGA for fulfilling its desired objectives and keeping its distinctive characteristics are:

. The Act offering life dignity to poor rural household in India by guaranteeing minimum 100 days of wage employment to ensure minimum livelihood security.

. This scheme is a demand driven employment strategy allowing for the self- selection of participants. REGS in India – An Overview 45

. Unemployment creates more issues to Government and inability of state to provide employment may always be questionable. So programmes like this help Government officials to provide gainful employment.

. Since the NREGA was enacted in Indian Parliament it is a legal obligation to provide fund for the scheme and not subject to budget allocation. So the livelihood of poor is not contingent upon the fiscal allocation.

. Another outstanding feature of this programme is that 60% of the total cost scheme should be spent for wages for unskilled labor and the balance 40% on wages of semi-skill, skilled and material cost.

. 100% central funding is available for wage of unskilled labour and 75% funding from Centre for wage of Semi-skilled, Skilled and Material costs.

. Fund allocation of the scheme is like non-lapsable corpus fund which can carry over to subsequent financial years and not like budgetary allocation.

. MGREGA give emphasis on the work of water conservation and harvesting, both very important in case rural people.

. Programe is designed as a decentralised implementation mechanism through PRIs.

. For ensuring transparency and accountability social auditing is also suggested under the Act.

. Workers are provided with amenities like drinking water, shelter, first aid and crèches.

. Under this scheme as possible no contract is permitted and use of machine also banned.

. Act contains provision for appointing ombudsman and to arrange three-tier system for grievance redressal mechanism.

. Under no circumstances shall the laborers be paid less than the wage prescribed in the Act.

. Progamme Officer and the Grama Panchayat may assign work to a person who applied for employment under the scheme. REGS in India – An Overview 46

. Provision for regular inspection and supervision of works taken up under the scheme shall be made to ensure proper quality of work as well as to ensure that the total wages paid for the completion of the work is commensurate with the quality and quantity of work done.

. All the accounts and records of the programme shall be made available for public scrutiny and copies of the documents may be provided on demand after paying the fee specified in the Act.

. Muster rolls of each scheme or project under the scheme shall be made available in the office of the Gram Panchayat for inspection of any person interested, after paying such fees specified in the Scheme.

Table 3.12: Multiple Goals of MGNREGS

Sl. No. Goal Action

Assistance ensuring consumption smoothening and 1 Protective immediate welfare. Insurance facilitating for risk taking such as investment 2 Preventive in agriculture. a) Economic stimulus through cash accumulation, local production and enhancing market b) Harmonizing labor market, promote rural nonfarm employment (RNFE) and equalize wage rate 3 Promotive c) Facilitate human capital formation through skill development; and d) Alleviate poverty, effect equity, reduce distress migration and empower women Source: Sharif and Abusaleh (2009)

3.4.3 Funding Patten of MGNREGA

The scheme was introduced in 2006 as a centrally sponsored cost sharing scheme between Centre and State Government. Cost related to the following activity will be provided by the Central Government:

. The full amount of wage due to unskilled manual workers REGS in India – An Overview 47

. 75% of the cost of material used and 75% of wages paid to semiskilled and skilled workers. . Expenses on administration as determined by Centre including salary and allowances of Programme Officer, Supporting staff and work site facilities. . Expenses of National Employment Guarantee Council (NEGC).

State Governments are labile to meet following expenses:

. 25% of the cost of material used and 25% of the wages paid to semiskilled and skilled workers . If State Government is not able to provide wage employment on time, they are liable to pay unemployment allowance. . Administration cost of State Employment Guarantee Council (SEGC) . Salary of State level and District level officers appointed under MGNREGA

Central share of the programme will be released to District Programme Coordinator and corresponding State share to the District will be released by the Commissioner for Rural Development and Local Self Government to the District Programme Coordinator.

Table 3.13: Major Changes in MGNREGA (2006-2014)

Sl. Timing Event Changes in Programme No.

A scheme to provide minimum 100days of NREGA Act Enacted February wage employment to rural poor introduced 1 and launched in 200 2006 as Center sponsored programme. Centre Backward Districts State fund sharing in the ratio of 90:10.

2 April 2007 Phase II expansion Scheme extended to 130 additional districts.

Scheme extended to all rural districts in 3 April 2008 Phase III expansion India and fund sharing ratio changed 75:25.

2009 4 Renamed Programme re named as MGNREGA. October REGS in India – An Overview 48

Sl. Timing Event Changes in Programme No.

Actions were taken to make the programme fully demand driven. Initiated appointment of full time dedicated Programme officer to reduce delay in wage 2011 Reforms in payment and also to ensure number of work 5 September MGNREGA days as per demand. Habitation level Committees formed to improve quality of assets created. District level ombudsman for proper grievance redressal

Rural asset creation became a stated objective. Allow the works in private land and land of small and marginal farmers. Skills development of workers also became part of objective. Permits private contracts in implementation 6 2012 May NREGA 2.0 launched of MGNREGA work. Permits use of machines. Convergence with projects from other ministries. Appointing dedicated staff at district level for making awareness among people about their rights under the Act.

MGNREGA to include works related to Januray Expansion of rural sanitation in collaboration with Nirmal 7 2014 coverage Bharath Abhiyaan (NBA) scheme, also toilets build under MGNREGA.

Source: 1. MGNREGA Circulars 2. Rajiv Ranjan (2016) REGS in India – An Overview 49

3.4.4 Qualifications for employment and rights of workers under the Act

Act proposes certain conditions for getting enrolled in the scheme and the same time once a person got registered under the Act he is capable to enjoy some protections as specified in the Act. A detailed description these two are given below:

a) Adult member from a rural family who are willing to do unskilled manual labour may submit their request to Gram Panchayat for the registration of their households and issuance of job card.

b) After the verification of request, Gram Panchayat will register the household and will issue a job card.

c) Registration made under the Act is valid for five years, and may be renewed from time to time.

d) Every adult member of a registered household whose name appears in the job card shall be entitled to apply for unskilled manual work.

e) All the registered members are

f) able to get employment as per their request subject to a maximum of 100 days in a financial year.

g) Programme Officer should ensure the availability of employment within fifteen days after the receipt of application and he should also ensure 1/3 participation of women in each work.

h) Application for work must be for at least fourteen days continuous work.

i) Intimation of work shall be communicated by means of a letter sent to the address mentioned in the job card and notice in this regard may be displayed at the office of the Panchayat.

j) Employment shall be provided nearby places of applicant’s village where the applicant resides at the time of applying (within a radius of 5 kms). REGS in India – An Overview 50 k) Act prescribes certain conditions for starting a new work, they are; at least 50 laborers become available for such work and the laborers cannot be absorbed in the ongoing work. These conditions shall not be applied to a work as determined by the State Government. l) If employment is not available within the specified radius, it must be provided with in the block. In this case an extra transportation allowance of 10 % of the wage shall be paid. m) In case where unemployment allowance is paid the Programme Officer should a letter to District Programme Coordinator (DPC) indicating the reasons why it was not possible for him to provide employment. n) List of persons who got employment under the scheme shall be displayed on the notice board of Gram Panchayat. o) In case of any injury or accident happened to any person in the course his employment, he is eligible for medical treatment. p) Facilities like drinking water, shelter and first aid box should be arranged at the site. q) If the number of children below the age of six accompanying women working at any site is five or more. One women worker can be deputed to look after such children and she is eligible for the wage rate. r) Wage under the scheme may be paid either wholly in cash or in cash and kind. If the wage is paid in kind at least 1/4th of the wage shall be paid in cash only. s) Act does not permit any discrimination on the ground of gender and provisions of Equal Remuneration Act, 1976 also applicable here. REGS in India – An Overview 51

Table 3.14: Notified Wage and its Enhancement from 2006 to 2014 (Rs. /Day)

Revised Minimum Wage % of Minimum

SL. increase State wage in No. 2005 2006-07

1.1.09 1.1.11 1.4.12 1.4.13 1.4.14 to 14 Up to to Up 1.1.2011 1 Assam 62 79.60 100 130 136 152 167 169 2 Andhra 80 80 100 121 137 149 169 111 3 Arunachal 57 67 80 118 124 135 155 172 4 Bihar 68 89 100 120 122 138 158 132 5 Gujarat 50 100 - 120 122 138 158 234 6 Haryana 95 141 - 179 191 214 236 148 7 Himachal 70 100 - 150 157 171 193 1756 8 Kashmir 45 70 100 121 131 145 157 249 9 Karnataka 63 82 100 125 155 174 191 203 10 Kerala 125 125 136 150 164 180 212 70 11 MP 59 91 100 122 132 146 157 166 12 Maharashtra 47 72 100 127 145 162 168 257 13 Manipur 66 81.4 - 126 144 153 175 165 14 Meghalaya 70 70 100 117 128 145 153 119 15 Mizoram 91 110 - 129 136 148 170 87 16 Nagaland 66 100 - 118 124 135 155 135 17 Orissa 55 70 90 125 126 143 164 198 18 Punjab 101 105 105 153 166 184 200 98 19 Rajasthan 73 100 - 119 133 149 163 123 20 Sikkim 85 100 - 118 124 135 155 82 21 Tamil Nadu 80 80 100 119 132 148 167 109 22 Tripura 60 85 100 118 124 135 155 158 23 UP 58 100 - 120 125 142 156 169 24 West Bengal 67 75 100 130 136 151 169 152 25 Chhattisgarh 59 75 100 122 132 146 157 166 26 Jharkhand 76 92 99 120 122 138 158 108 27 Uttarakhand 73 100 - 120 125 142 156 114 28 Goa - 110 - 138 158 178 195 77 29 Andaman - 130 - 170 178 198 222 71 30 Nicobar 139 - 181 189 210 235 69 31 Puducherry - 80 100 119 132 148 167 109 32 Dadar - 108.2 - 138 157 175 182 68 33 Daman &Diu - 102 - 126 136 150 170 67 34 Lakshadweep - 115 - 138 151 166 195 70 35 Chandigarh - 140 - 174 189 209 227 62.14 Source: Website of MGNREGA REGS in India – An Overview 52

3.4.5 Implementing and monitoring agencies of the scheme.

Central Employment Guarantee Council (CEGC): Ministry of Rural Development, Central Government of India constitutes Central Employment Guarantee Council to perform the duties assigned by the Act. The council headquartered in Delhi. Council includes a Chairperson, members nominated by Central Government and members nominated State Government, not more than 15 non official members representing PRIs.

Functions of CEGC

. Establishment of Central evaluation and monitoring system. . Providing advices to Central Government on Implementation of the scheme. . Review and provide recommendations on the functioning of monitoring and redressal mechanism. . Promote widest publicity on various schemes under the Act. . Compilation of annual reports to be submitted before the Parliament by the Central Government. . Any other duty or functions as may be assigned by the Central Government.

State Employment Guarantee Council (SEGC): For regularly monitoring and reviewing the implementation of the scheme each State Government shall constitute a State level Council. Council includes a Chairperson and members determined by the State Government.

Functions of SEGC

. Advising State Government on matters concerning the implementation of the scheme. . Determining the preferred work. . Review of monitoring and redressal mechanism and recommending improvement. . Making widest publicity of the Act and Schemes. REGS in India – An Overview 53

. Coordinating with CEGC for the implementation and monitoring of various schemes. . Preparing annual report to be submitted before the State Assembly. . Any other functions assigned by Central Council or State Government.

Gram Panchayat: It is the duty of Gram Panchayat to identify the project to be included under a scheme as per the recommendations of Gram Sabha and Ward Sabha. It shall forward proposals of development project to Programme Officer for scrutiny and primary approval prior to the commencement of the year in which it is proposed to be executed. Muster Roll of approved works will be forwarded to the Gram Panchayat by the Programme Officer.

Block Panchat: It has to approve the Block level plans and needs to forward the same to District Panchayat for the final approval. Supervision and monitoring of project taken up at the Gram Panchayat level and Block level are the other responsibilities of Block Panchayat in connection with the Act. State Council has power to assign other duties to Block Panchayat.

District Panchayat: District Panchayat has to approve and finalize Block level shelf projects to be taken up under a programme under the scheme. It is the duty of District Panchayats to supervise and monitor the project taken up at Block level and District level. State Council is authorised to assign any duty to District Panchayat from time to time.

District Programme Coordinator (DPC): DPC is appointed by the concerned State Governments. District Collector or Chief Executive Officer of the District Panchayath shall be designated as DPC for the proper implementation of MGNREGA in the District. Functions of District Programme Coordinator are:

. Provide assistance District Panchayat in discharge it functions under the Act. . Consolidate Block level plans and plans of other implementing agencies to include them in shelf project to be approved by the Panchayat at District level. REGS in India – An Overview 54

. Accord administrative approval. . Supervise, review and monitor the performance of Programme Officers . Periodic inspection of the work in progress. . Redress the grievances of applicants.

Programme Officer: State Government Shall appoint a person at Block level as programme officer not below the rank of a Block Development Officer. Programme Officer needs to assist implementation of the scheme and discharging all other function specified in the Act. He is also responsible to match demand for employment and employment opportunities under his jurisdiction. Below given are the functions of a Programme Officer:

. Monitoring the project taken up by the Gram Panchayath and other implementing agencies.

. Sanctioning unemployment allowance to eligible households.

. Ensuring prompt and fair wage payment.

. Ensuring regular social audit of the work carried under the scheme and authorized take action on the objection raised in the social audit.

. Dealing the complaints that may arise in connection with the implementation of the scheme.

. Any other work assigned to him by the District Programme Coordinator/ State Government. REGS in India – An Overview 55

3.4.6 Performance of MGNREGA

Table 3.15: Coverage of MGNREGA at a Glance

FY FY FY FY Particulars (2010-11) (2011-12) (2012-13) (2013-14) Total Number of District covered 635 636 644 645 Total Number of Blocks covered 6378 6568 6576 6601 Total Number of GPs Covered 246248 246358 247578 247643 Total Number of Villages Covered 778133 778288 778346 778411 Total no. of HH Registration(in Cr) 13 13.2 13.3 13.6 Total no. workers in job card (in Cr) 27.8 29.3 29.5 28.9 Total no. GPs with NIL exp 25389 26190 26097 112190 Total no. of works taken up (in lakh) 80.8 104.6 93.6 73.8 Total no. ongoing works (in lakh) 53.2 79.1 72 72.7 Unskilled Wages paid (Rs. in Cr) 24306.2 27152.8 26588.8 4407.3 Material and Skilled wages (Rs. In 10650.5 10430 9602.1 1184.5 Cr) Source: MGNREGA website

Table 3.16: Financial Analysis of MGNREGA at a Glance (Rs.in CR)

FY FY FY FY Particulars (2011-12) (2012-13) (2013-14) (2014-15) Admn Exp at GP level 301.8 307.6 224.7 6 Admn Exp at Block level 1191.7 1330.1 1329.3 104.4 Admn Exp at District level 514.4 482 592.6 30.5 Admn Exp at State level 108.055 32.936 200166 19.557 Total Admin Exp 2116 2152.7 2346.7 160.5 Total Exp 37072.7 39735.4 38537.6 5752.3 % Labour Cost to total 69.5 72.2 73.5 78.8 % Admin Exp to total 5.7 5.4 6.1 2.8 Source: MGNREGA website REGS in India – An Overview 56

Table 3.17: Employment Creation by MGNREGA at a Glance (in lakhs)

FY FY FY FY Particulars (2011-12) (2012-13) (2013-14) (2014-15) Wage employment to HH 506.4 498.9 478 116.3 Wage employment to Individuals 820 797.3 736 165.2 Wage employment to men 446.6 422.1 383.3 67.3 Wage employment to women 373.3 375.3 35.8 97.9 Wage employment to SCs 185 181.7 167.3 36.9 Wage employment to STs 147.4 142.9 129.3 28.6 Wage employment to disabled 4 4.6 4.8 1.6 Persons days generated 218.8 230.5 219.7 19 Avg. Wage rate per day per person(Rs.) 114.5 121.4 132.7 130.3 Avg. Days of employment per HH (no.) 43.2 46.2 46 16.3 No. HH completed 100 days 41.7 51.7 46.3 0.1 employment Source: MGNREGA website

Ministry of Rural Development (MoRD) revealed in 2014 that MGNREGA is performing in accordance with its objectives outlined in NREGA 2005. Performance MGNREGA is assessed using various parameters like its ability to provide employment and rural livelihood security; ability for social inclusion of women, SCs and STs; its performance on financial ground; and its performance on work taken and completed leading to asset creation for the rural areas. Below given table shows the performance MGNRGA regarded to the provision of employment to rural poor. REGS in India – An Overview 57

Table 3.18: Performance Analysis of MGNREGA

Financial Year Particulars 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 Total job card 3.78 6.48 10.01 11.25 11.98 12.50 12.79 12.72 issued (in Cr) Employment 2.10 3.39 4.51 5.26 5.49 5.06 4.98 3.81 to HH(in Cr) Total Person 90.5 143.5 216.32 283.5 257.15 218.76 229.86 134.80 days (in Cr) Person days of 22.95 39.36 63.36 86.45 78.76 48.47 50.96 31.53 SC (in Cr) 25% 27% 29% 30% 31% 22% 22% 23% Person days of 32.98 42.07 55.02 58.74 53.62 40.92 40.75 21.09 ST(in Cr) 36% 29% 25% 21% 21% 19% 18% 16% Person days of 36.4 61.15 103.57 136.4 122.74 105.27 117.93 73.33 Women (in Cr) 40% 43% 48% 48% 48% 48% 51% 54% Person days 43 42 48 54 47 43 46 35 per HH (nos) *up to December 2013, Source: MGNREGA website

Figure 3.1: Performance of MGNREGS between 2006-07 and 2013-14

REGS in India – An Overview 58

Figure 3.2: Average Number of Person Days per Household between 2006-07 and 2013-14.

60

50

40

30 Person days per 20 Household

10

0

Above table shows that total number of job card issued have increased slightly from 2009-10 onwards. Job card is valid for five years, from 2009-10 to 2013-14 61.24 crore. Job cards have issued and which is covering almost half of Indian population. This statistic shows the coverage of the programme and the remarkable achievement of MGNREGA. From 2009-10 to 2013-14, scheme provided 24.6 crores employment which is around 40% of the total job card issued. There two reasons are there for this lower statistics, first, job cards were issued persons who belongs to the same households and second, the Government’s inability to employment to those demanded employment under the scheme.

Participation SC community shows and increasing trend up to the financial year 2010-11 since inception. But there after it seems to decline till 2013 end. Participation ST Community shows a continuing decline trend from 36% in 2006-07 to 16 % by 2013 end. Both of these statistics show that MGNREGA is not that much attractive for SCs and STs and they have found better employment option than that. So Government should take initiation to make them include in the scheme to ensure social inclusion of both SCs and STs. Participation women in MGNREGA shows an increasing trend from 40% in 2006-07 to 61 % in 2013-14. It is a positive REGS in India – An Overview 59 sign and can conclude that MGNREGA is very successful in social inclusion of women in India. It also a sign another rural livelihood strategy where in male members will select employment opportunity which provide as higher wage rate and females trying to earn from MGNREGA to boost their total family income.

3.5 MGNREGA in Kerala

State of Kerala has welcomed the Scheme MGNREGA in the 2006 and the State is very successful in exploiting all the opportunities offered by the scheme and in Kerala programme came to know Kerala State Rural Employment Guarantee Scheme. In Kerala the programme is implemented in February 2006 in the rural areas of backward district Wayanad and Palakkad and it was extended to two other districts Kasaragod and Idukki by February 2007. The remaining 10 districts were covered by the programme in January 2009. Government of Kerala have implemented a detailed guidelines for proper conduct of the programme in the state and the responsibility implementing the scheme assigned to local self-governments. Local self-governments in Kerala are implementing the scheme in association with Kudumbashree and it is one of the outstanding features of the programme in the State.

Table 3.19: Demographic Profile of Kerala State

Sl. No. Particulars India Kerala 1 Total Population 1,028,737,436 31,841,374 2 Sex ratio 933 1058 3 Literacy ratio 64.8% 90.9% 4 Life expectancy at birth (2002-06) Male 62.6 71.4 Female 64.2 76.3 Total 65.4 74 5 IMR (Per 1000 live birth) Male 55 10 Female 56 13 Total 55 12 6 Birth rate per 1000 22.8 14.6 7 Death rate per 1000 7.4 6.6 Source: 2011 Census REGS in India – An Overview 60

Table 3.20: Work Profile of Kerala Population

Sl. No. Particulars India Kerala 1 Total Workers Male 275014476 7765645 Female 127220248 2518242 2 Non Workers Male 257142296 7702969 Female 369223308 13854518 3 Main Workers Male 240147813 6460693 Female 72857170 1776280 Total 313004983 8236973 4 Marginal Workers Male 34866663 1304952 Female 54363078 741962 Total 89229741 2046914 5 Cultivators (per cent) Male 31.1 7.8 Female 32.9 4.8 Total 31.7 7 6 Agriculture Labours (per cent) Male 20.8 13.9 Female 38.9 21.5 Total 26.5 15.8 7 Household Industry Workers (per cent) Male 3.2 2.5 Female 6.5 7.1 Total 4.2 3.6 8 Other Workers (per cent) Male 44.9 75.9 Female 21.7 66.5 Total 37.6 73.6 Source: 2011 Census REGS in India – An Overview 61

State of Kerala is considered as the well-developed State of India. High Standard of living and literacy rate make the State different from other states in India. State has a well-developed health care system and public distribution mechanism. Kerala is one of the densest States in the country with 859 persons per sq.km which three time to the national average. Kerala is the only state in India having a positive sex ratio 1084 female per 1000 male. Literacy rate of the State was 47.18 % in 1951 and it has increased to 97.90% in 2011 census. As far food production is concerned state has low base and facing a serious challenge to protect the farming area and to improve productivity of important crops. Kerala Agricultural economy has been undergoing a structural transformation since the mid-seventies by switching over a large proportion of its traditional corps area devoted to subsistence crop like rice and tapioca to more remunerative cash crops. More over the area under cultivation is also declining consistently over last several years.

In Kerala rural households can be classified into two dimensions agricultural and non-agricultural. Poor mass of rural Kerala are categorized as agricultural labourers, fisher folks and the tribes. Three fourth of the rural working class are casual laborers and among this 44% are engaged in agriculture and 31% in non- agriculture. Non-agricultural activities include fishing in coastal areas, coir processing, cashew processing, handloom and other traditional occupation. SCs and STs constitute less than 10 % of the state population and greater incidence of poverty. The combination of poverty and limited supply of fertile land for cultivation and other environmental resources results in few opportunities of poor grassroots actors to escape their dependent circumstances simply through hard work. Kerala economy is witnessing a structural transformation for the last two decades. People lost hope on agriculture and most of them sifted to other sectors. Flow of NRI money also has certain impact on this side and it has enhances the pace of structural reforms. The effects of this crisis are felt on rural household especially the poor and rural marginalized, who depend entirely on agriculture for their livelihood. REGS in India – An Overview 62

3.5.1 Unemployment in Kerala

Problem of unemployment is a burning issue in Kerala always and the state is the highest unemployed state among the states of India which account 25.5%. The condition of unemployment is said to prevail when supply of labor exceeds its demand. From 1970s onward there has been a tremendous growth in the labor supply because of the increase in number of women who seek employment. The problem of unemployment in Kerala is not only about educational unemployment but also simple unemployment of unskilled and semi-skilled workers. According to NSSO survey 2009-10 unemployment rates among males in Kerala was 12.7% and that of female was 25.9% based on CDS approach. Rate of unemployment among rural population was 17.3% and that of urban population was 14.8%. Below given table explains the district wise unemployed rates in Kerala as per 2011 all India censes.

Table 3.21: District wise Details of Unemployment in Kerala

Number of Unemployed Unemployment Rate (%) Districts Male Female Total Male Female Total Thiruvananthapuram 64660 43937 108597 9 18.4 11.4 Kollam 38157 47087 85244 6.6 22.4 10.9 Pathanamthitta 26453 15410 41863 8.5 46.1 12.2 Alappuzha 29809 85680 115489 6.5 30.3 15.6 Kottayam 33508 79160 112668 7 25.2 14.2 Idukki 15933 14980 30913 5.8 14.9 8.3 Ernakulum 39532 60014 99545 4.7 24.7 9.3 Thrissur 52015 24014 76029 8.6 14.9 9.9 Palakkad 35435 37384 72819 5.3 15.1 7.9 Malappuram 35300 19556 54857 4.7 16.4 6.3 Kozhikode 25450 32345 57795 3.8 19.9 6.9 Wayanad 8029 7545 15574 4 10.7 5.7 Kannur 32337 79721 112059 6.7 36.8 16.1 Kasargod 28825 32986 61811 8.5 22 12.6 Kerala 465444 579819 1045262 6.4 22.3 10.5 Source: Directorate of Employment 2011 REGS in India – An Overview 63

Unemployment rate is considerably high in south and north boundary of the state, the highest rate in at Kannur 16.1% and the same is lower in Wayanad district 57%. In the southern districts from Trivandrum to Kottayam rate of unemployment is relatively high comparing to other districts in the state. Rate unemployment in Kerala raises due to number of factors like low rate growth of state economy, changing profile of the work force and lack of appropriate educational system. The organized sector in Kerala is not growing as expected to absorb the job seekers of the state.

Table 3.22: Demand for Employment in Kerala from 2001-2011 (in Lakh)

Below SSLC SSLC & above Total Demand for Year Employment Persons % Persons % (Lakhs) 2001 9.67 21.8 34.64 78.2 44.31 2002 7.12 19.3 29.68 80.7 36.80 2003 7.46 18.6 32.58 81.4 40.05 2004 6.73 17.9 30.83 82.1 37.56 2005 6.29 17.1 30.41 82.9 36.70 2006 6.37 16.5 32.19 83.5 38.57 2007 6.31 15.8 33.58 84.2 39.89 2008 6.22 15.1 35.22 85 41.44 2009 6.24 14.50 36.76 85.49 43 2010 5.94 13.87 37.27 86.12 43.28 2011 5.86 13.50 37.56 86.50 43.53 Source: Directorate of employment Total demand for employment of persons having educational qualification below SSLC is showing a declining trend. It is a sign of increase in the educational level youths in Kerala. Same time demand for employment of persons having education above SSLC is showing a growing trend year by year. For assisting unemployed youths, Kerala State Government has introduced a scheme in 1982. As per Kerala Panchayat Raj Act 1994 operation of this scheme was transferred to local bodies. There are 337032 beneficiaries in the state under this Act as per the statistics REGS in India – An Overview 64 of 2011. In this scenario MGNREGA has large importance in Kerala. It has been catering needs of large unemployed rural mass of Kerala from 2006 onwards.

3.5.2 Performance of MGNREGA in Kerala

State occupies just 1% of the total geographical region of the country and this piece of land is considered as most beautiful, cleanest and peaceful parts of the nation. Kerala economy is predominantly agrarian in nature 53.08 % of rural household are depending agriculture which is lower than the national average of 66.76%. But in case of per capita income and production state is lagging behind many other states in the Country. The Kerala Rural Employment Guarantee Scheme (MGNREGA) was launched on 5th February 2006 in two districts, and then extended to all the 14 districts of the states in the next two phases.

Table 3.23: Job Cards Issued in Kerala under MGNREGA

Cumulated number of household got job card (in 000) Districts 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Palakkad 208.59 231.51 240.87 163.32 222.98 253.71 Wayanad 122.96 132.15 145.59 90.64 109.86 120.18 Idukki 150.49 202.64 221.44 124.79 154.38 165.16 Kasaragod 89.46 111.48 121.57 70.58 97.42 110.82 Alappuzha 187.85 246.06 264.45 173.31 190.78 227.15 Ernakulam 112.56 175.97 195.67 132.30 147.84 182.32 Kannur 112.51 155.46 172.85 103.93 152.58 179.88 Kollam 136.92 194.51 223.39 149.95 210.85 260.65 Kottayam 76.31 132.47 159.10 120.94 133.49 160.50 Kozhikode 159.93 223.61 275.18 168.12 195.30 239.96 Malappuram 157.11 214.90 254.56 163.39 185.24 247.82 Pathanamthitta 57.51 92.09 97.78 75.10 94.31 119.72 Trivandrum 203.88 270.58 294.62 204.39 250.09 308.86 Thrissur 121.64 206.02 248.59 116.07 146.71 236.37 Total 1897.71 2599.45 2915.67 1856.81 2161.77 2813.12 Source: MGNREGA website REGS in India – An Overview 65

Registration of households is compulsory under this after the registration concerned local bodies will issue job card within 15 days from the date of registration. Once a household got registered under the scheme the registration is valid for coming five years. After observing the benefits of the scheme, the rural households in Kerala started joining the scheme. This is because the number of job card issued increased from 18.98 lakh in 2008-09 to 28.13 lakh in 2013-14. Trivandrum district has highest number of job card holders as 31st March 2014.

Table 3.24: Details of Work Demanded and Provided in Kerala under MGNREA

Employment to households (in 000) % of Employment Year provided to Demanded Provided demanded 2006-07 104.93 99.11 94.45 2007-08 259.28 185.39 71.50 2008-09 698.68 692.02 99.05 2009-10 957.48 955.98 99.84 2010-11 1186.36 1175.82 99.11 2011-12 1418.06 1416.39 99.88 2012-13 1693.89 1525.49 90.06 2013-14 1678.12 1523.19 89.19 Source: MGNREGA website REGS in India – An Overview 66

Table 3.25 Employment Provide on Demanded under MGNREGA in Kerala

% of Employment Provided for households on demanded Districts 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Palakkad 100 100 99.66 99.96 94.15 92.95 Wayanad 99.63 100 99.18 99.89 91.04 91.11 Idukki 99.75 99.97 99.45 99.97 94.81 90.89 Kasaragod 97.25 99.97 99.48 99.98 87.94 85.56 Alappuzha 98.31 100 98.24 99.85 94.92 94.46 Ernakulam 99.64 99.04 99.69 99.94 89.14 87.57 Kannur 99.28 99.53 99.72 99.84 85.66 87.64 Kollam 94.44 99.58 96.11 99.80 87.53 84.29 Kottayam 97.85 99.68 99.32 99.84 87.94 86.70 Kozhikode 98.87 99.87 99.56 99.84 90.94 89.42 Malappuram 99.79 99.93 99.52 99.82 89.65 87.88 Pathanamthitta 97.25 99.90 99.45 99.95 85.74 88.51 Trivandrum 99.94 100 99.20 99.95 90.75 84.09 Thrissur 99.51 99.78 99.74 99.74 86.10 93.01 Total 99.05 99.84 99.11 99.88 90.06 89.19 Source: MGNREGA website

Above tables show that implementation of very effective in Kerala, an overview of the MGNREGA in the past 8 years reveals that the employment opportunities have significantly gone up since the implementation of the scheme. The quantum of employment opportunities provided to rural households has recorded an increase of more than two times from 6.92 lakhs in 2008-09 to 14.97 lakhs in 2013-2014. When comparing the employment generation at national level State of Kerala perform far better, during the period of 8 years from 2006-07 to 2013-14 employment demanded and provided in Kerala grew at an average rate of 37.06% and 37.97%. The all India growth of both these cases is 10.27% and 9.44% respectively. From 2010-11 onwards none of the districts in Kerala was able to provide employment to all the households who demanded employment. REGS in India – An Overview 67

Table 3.26: Generation of Employment in Kerala under MGNREGA Person Days (in lakhs) District 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Palakkad 37.4 46.18 45.93 53.08 72.19 72.39 Wayanad 26.73 31.86 19.73 26.61 33.87 33.63 Idukki 16.54 45.55 57.47 56.81 75.93 56.04 Kasaragod 13.71 17.54 20.02 20.98 28.07 26.26 Alappuzha 4.7 24.74 51.48 73.56 94.38 87.65 Ernakulam 6.05 13.21 31.94 51.79 58.08 49.06 Kannur 5.29 12.07 18.31 26.38 34.68 33.76 Kollam 5.12 17.18 29.71 47.77 69.17 62.56 Kottayam 1.73 9.28 20.41 29.91 36.50 28.85 Kozhikode 6.15 21.63 37.12 43.33 54.92 54.99 Malappuram 7.45 23.1 33.33 41.37 54.35 51.63 Pathanamthitta 3.44 92.91 17.54 23.61 35.74 33.30 Trivandrum 10.36 41.54 57.13 94.26 63.12 56.12 Thrissur 9.06 22.43 40.2 42.49 125.30 148.14 Total 153.72 339.71 480.32 631.9 837.7 794.36 Source: MGNREGA website

Table 3.27: Households Completed Guaranteed Number of Employment No. households completed 100 days Employment (000) District 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Palakkad 5.10 6.97 7.09 8.67 22.02 25.11 Wayanad 4.08 7.12 1.89 3.11 8.61 13.78 Idukki 1.80 12.24 13.02 15.67 32.90 23.39 Kasaragod 2.33 3.42 3.28 2.93 9.24 11.94 Alappuzha 0.02 0.57 3.62 10.19 36.50 48.48 Ernakulam 0.06 0.34 4.93 16.09 24.80 22.68 Kannur 0.11 0.72 2.41 3.72 7.80 9.51 Kollam 0.08 0.83 3.48 10.28 29.46 31.1 Kottayam 0.01 0.44 1.67 4.20 8.66 7.65 Kozhikode 0.01 1.19 3.18 5.18 10.07 21.09 Malappuram 0.05 2.85 5.71 8.74 25.30 27.22 Pathanamthitta 0.02 0.88 1.31 2.86 15.03 15.33 Trivandrum 0.41 3.22 10.83 21.58 32.92 114.58 Thrissur 0.27 2.80 5.57 11.10 70.57 34.57 Total 14.34 43.60 67.97 124.32 339.87 406.42 Source: MGNREGA website REGS in India – An Overview 68

Job generation under MGNREGA in terms of person days witnessed a sharp and study increase from 153.73 lakh in 2008-09 to 794.36 lakh in 2013-14. Persons day created for women grew at an exceptionally higher rate than that of men, Women caught 93.43% of total employment generated from 2008-09 to 2013-14 and it brought Kerala in the top position in case of female work participation. About 406420 households finished 100 days of employment in the year 2013-14 and in 2008-09, 14344 families, it shows an increase of 19.43 time over six year period of full implementation. During 2008-09 on an average 22 days employment were provided each household, which increased to 53.7 days in 2013-14. Thiruvananthapuram District ranked first in providing guaranteed number of employments to households.

Table 3.28: Financial Analysis MGNREGA in Kerala

Amount (Rs. In crore) % of Year Available Utilised Utilisation 2006-07 48.4 27.90 57.7 2007-08 99.4 83.4 83.58 2008-09 297.7 224.6 75.42 2009-10 591.2 471.5 79.76 2010-11 843.3 704.3 83.52 2011-12 1045.9 1005.1 96.10 2012-13 1431.4 1415.1 98.87 2013-14 1372.1 1225.6 89.32 Total 5729.7 5157.4 83.03 Source: Compiled from MGNREGA website

One of features of MGNREGA is that it is a demand based entitlement programme. Fund for the initial year is released on the basis of annual labor budget prepared by each state at the beginning of the year and in the subsequent years fund will be released on the basis demand on expenditure. Total fund available in this scheme includes amount allotted by the Central Government, State fund and REGS in India – An Overview 69 unutilized amount of the previous year. At all India level fund made available under the scheme increased from Rs. 12073.62 crore in 2006-07 to 42292.57 crore in 2013-14 and marked growth of 16.2%. But during the same period fund made available for Kerala has been registered an increase of 48.65%. Fund utilized also shows an increase of 16.26 % at national level, but in Kerala this amount of increase is 19.89%.

3.6 MGNREGA and Kozhikode District

Kozhikode district, a district of Kerala is situated in its southwest costal region. Kozhikode District came in to existence on 1st January 1957, headquartered in Kozhikode with geographical area of 2345 Square km. Total number of household in the district as per 2011 censes is 683825 and the total population of the district is 3086293. District has 3 Taluks, 12 Blocks, 75 Gram Panchayats, 51 Villages and 55 towns as per 2011 censes. 67.15% of the total population is living in urban area and the balance 32.85% in rural area. Sex ratio of the district is 1098 females per 1000 males. Literacy rate of the district is 95.08. Total number of work force in the district is 948981 among this 752333 are males and 196648 are females. Economy of the district is mainly dependent on agriculture. More than half of the population is engaged in agriculture in order to earn their bread and butter. The main produces of the state are Coconut, Banana, paddy, rubber, arecanut, etc. Every year huge chunk of revenue comes from these products and helps the economy to a great extent.

MGNREGA has been implemented in the district in 2008 during the third phase of its expansion. By the year 2013-14 239960 job cards are issued in the district among these 171688 are very active. Programme had vided coverage in the district; all the 12 Blocks in the district are coming under the coverage of the Act. 69 Gram Panchayats in the district have implemented the programme in their jurisdiction. In the district total 469052 workers are registered under the Act and among these 197160 are the active workers of the scheme. In the total number on registered workers 46676 are SCs, 4512 are STs and 289614 are females. By the end REGS in India – An Overview 70 of the financial year 2013-14 MGNREGA have created 5499000 person days of work in the district. Statistics shows that MGNREGA is highly successful in the district in case of social and financial inclusion of women, SCs and STs of the region. It also had great positive impact on economic and social empowerment of weaker session of the society.

Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 71

Chapter IV IMPACT OF MGNREGS ON AGRICULTURAL LABOUR SUPPLY OF KOZHIKODE DISTRICT

4.1 Introduction

As the unemployment rate is approaching the range of 10 per cent, burden riding on the authorities to arrange a new and creative measure which could keep unemployment and poverty under control. In such a circumstance, the Government of India launched the National Rural Employment Guarantee Scheme, which is by far the prime ever public works programme under the globe. The scheme offers guaranteed employment for 100 days in a financial year to one member of eligible household. The Act was enacted in February 2006, was renamed as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on 2nd October 2009. After nine years of its execution, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is viewed as a ‘blessing to the poor’ as it has convened numerous aids, especially to the rural people. A rural household can make use of its manpower to yield a yearly revenue of say Rs.20,000/-.

The system has improved the societal position of both male and female members from the weaker communities, including the SCs and STs. The scheme has formed valuable assets and basic utilities in the rural areas. Nevertheless, notwithstanding this achievement, the scheme is facing blame from various angles. One among the foremost disparagements is that it has harmfully disturbed the availability of labourers in the agricultural sector and has increased their wages. It has is also accused that the labourers desires to work in MGNREGS over other labour, due to its fewer sweat, lesser administration and is providing additional amenities.

In such a scenario, in this chapter, the researcher tries to examine the impact of the employment guarantee scheme MGNREGS on agricultural labour supply of Kozhikode District. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 72

4.2 Data Analysis

4.2.1 Age Analysis of the respondents

Table 4.1: Age Group of Respondents

Sl. No. Age Group No. of respondents Percentage to total 1 < 30 38 10 2 30 - 40 116 30 3 40 - 50 137 36 4 50 - 60 62 16 5 > 60 31 8 Total 384 100 Source: Survey data

Figure 4.1: Age wise Classification of the Respondents of the Scheme

31 38

62 Below 30 years 30 - 40 years 116 40 - 50 years 50 - 60 years Above 60 years

137

Above table reveals that 66% of the respondents are between 30 and 50 years of age. Only 10% and 24% of respondents are from below 30 years and above 50 years age category respectively. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 73

4.2.2 Gender wise age analysis of the respondents

Table 4.2 Gender Wise Classification of Respondents and their Age Group

Sl. No. Gender Age Group No. of respondents Percentage to total < 30 1 3.70 30 – 40 3 11.11 40 – 50 4 14.81 1 Male 50 – 60 7 25.93 Above 60 12 44.44 Total 27 100 < 30 37 10.36 30 – 40 113 31.65 40 – 50 133 37.25 2 Female 50 – 60 55 15.41 Above 60 19 5.32 Total 357 100 Source: Survey data Figure 4.2: Gender wise Age Classification of Respondents of the Scheme

140 120 100

80 Male 60 Female 40 20 0 Below 30 Years 30 - 40 Years 40 - 50 Years 50 - 60 Years Above 60 Years

The above table depicts that about 93% of the respondents are women, which clearly reveals the women domination in the participation of the scheme and social inclusion of women, which is higher than the state average of 81%. The analysis also shows that majority of the male workers enrolled to the scheme are in the age group above 50 years which displays the disregard of the younger and middle aged male population to choose this scheme due to lower wage rate than the market wage rate. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 74

4.2.3 Religion and Cast analysis of the respondents

Table 4.3: Religion wise Classification Table 4.4: Caste wise Classification of the Respondents of the Respondents Sl. No. of Sl. No. of Religion Percentage Cast Percentage No. respondents No. respondents Upper 1 Hindu 229 60 1 68 18 Cast 2 Muslim 127 33 2 OBC 230 60 3 Christian 23 6 3 SC 71 18 4 Others 5 1 4 ST 12 3 Total 384 100 5 Others 3 1 Source: Survey data Total 384 100 Source: Survey data From the above table, it is clear that almost 60% of the respondents are from Hindu community, Muslims and Christians have participation to the extent of 33% and 6% respectively, which reveals the participation of people from every religion in the scheme. Likewise, the participation from the OBC community is the highest at 61%, whereas the SC / ST together trail with 21% participation. This all shows that, the scheme is accepted by all the religions and casts in our society, especially the weaker sessions.

4.2.4 Educational qualifications of respondents

Table 4.5: Educational Qualification of Respondents

Sl. No. Education Level No. of Respondents Percentage 1 Illiterate 4 1 2 Primary Level 68 18 3 Secondary Level 157 41 4 Higher secondary Level 108 28 5 Graduation 38 10 6 Above graduation 9 2 Total 384 100 Source: Survey data Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 75

Figure 4.3: Education Status of Respondents

Education level of the respondents shows that 4 of the respondents never went for schooling and 18% of the participants completed only primary level education. 41 % of the respondents have completed or qualified SSLC examination and 108 of the total participants are qualified higher secondary or pre-university. Another interesting fact is that 10 % of the sample population is university graduates and 2 % possess qualification above Graduation like B.Ed, Computer Diploma etc.

4.2.5 Marital status of the respondents

Table 4.6: Marital Status

Sl. No. Status No. of Respondents Percentage 1 Married 331 87 2 Unmarried 26 6 3 Widowed 27 7 Total 384 100

87 % of the participants of the sample population are married and leading a family life and another 7% percentage are married but is now widowed. A minor portion (6%) of the respondents is unmarried. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 76

4.2.6 Year of enrollment to MGNR EGS

Table 4.7: Year of Enrollment in MGNREGS

Sl. Year of Enrollment No. of Respondents Percentage No. 1 2008-09 88 23 2 2009-10 115 30 3 2010-11 71 18 4 2011-12 11 3 5 2012-13 59 15 6 2013-14 40 10 Total 384 100

Figure 4.4: Annual Enrolments to the Scheme

140

120

100

80

60 Series 1

40

20

0 2008 - 09 2009 -10 2010 - 11 2011 - 12 2012 - 13 2013 -14

Majority of the respondents were enrolled into the scheme during the initial stage of the scheme. Survey data reveals that 71% of the respondents enrolled into the scheme between the years 2008 and 2011. Then the rate of enrollment started declining. Comparing the rate of enrollment and age group of the respondents, it can be concluded that the scheme has lost its charm and attraction among the youngsters. Registration to the scheme is valid for five years after which the respondents should apply for re-registration. Most of the respondents opined that the Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 77 scheme was less attractive during the years between 2010 and 2012 due to delayed payment of wages and shortage of guaranteed work days; majority of the respondents left the scheme during this term due to the above reasons and got reregistered at a later stage.

4.2.7 Occupation of the respondents before enrolling into MGNREGA

Table 4.8: Occupation wise Classification of the Respondents

Sl. No. Occupation No. of respondents Percentage 1 Agricultural Labour 103 26 2 Homemaker 168 43 3 Farming 34 8 4 Private employment 22 6 5 Self-employed 18 5 6 Construction 14 4 7 Others 17 5 8 Unemployed 8 3 Total 384 100 Source: Survey data

Figure 4.5: Occupation wise classification of the respondents

14 8 18 17 Agricultural Labour

103 Homemaker 22 Farming Private - employment 34 Self-employed Construction Labour Others

168 Unemployed

Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 78

The above table shows the occupation status of the respondents before enrolling to MGNREGS. Among the respondents, 43% were homemakers, which make this category the prime element of the respondent population. Since the percentage of homemakers is very large, it is the proof of financial and social inclusion of women happened after the introduction of the scheme MGNREGS. It is one among the prominent impacts of the Act, Mahatma Gandhi National Rural Employment Guarantee Act. 26% of the respondents were employed in agricultural sector and 3% of the sample population was unemployed before the introduction of the scheme MGNREGS.

4.2.8 Source of worker’s income other than MGNREGA

Table 4.9: Source of Income other than MGNREGA

Sl. No. Source No. of Respondents Percentage 1 Agricultural labour 89 23 2 Farming 43 11 3 Private employment 18 5 4 Self-employed 16 4 5 Construction 29 8 6 Others 36 9 7 No. other source 153 40 Total 384 100 Source: Survey data

MGNREGA guarantees 100 days of employment in a year, but secondary data reveals that after the introduction of the scheme in Kozhikode District in 2008 very few of the local bodies were successful in providing 100 days of work to the workers. Before enrolling to this scheme about 57% of the respondents were depending on other sources of income to have their bread and butter. Since the MGNREGA wages are not enough to meet their livelihood expenses they are depending on the same old sources of income for earning when the scheme is not Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 79 active. Survey data shows that 40% of the respondents do not have any sources of income other than MGRNRES and most of them are house wives.

4.2.9 Annual family income of the respondents Table 4.10: Annual Family Incomes of the Respondents

Sl. No. Income (Rs.) No. of Respondents 1 Upto Rs.25000 37 2 25000 to 50000 134 3 50000 to 75000 172 4 75000 to 100000 28 5 Above 100000 13 Total 384

Figure 4.6: Family Income of Respondents

200 180 160 140 120 100 80 60 40 20 0 Table 4.11: Worker’s Contribution to Total Family Income

Sl. No. Worker’s contribution to total family income No. of respondents 1 Upto 25% 29 2 25 – 50% 173 3 50 – 75% 161 4 More than 75% 21 Total 384 Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 80

Annual family income of the respondents shows that most of them belong to marginalized class of the society and annual family income of the majority of the respondents is below Rs.100000. This is not enough to keep a minimum standard of living when the cost of living is increasing day by day. Analyzing the contribution of MGNREGA workers towards their annual family income, it seen that most of them are contributing a considerable portion to their total family income. In certain cases MGNREGS is the only source income of the family.

4.2.10 Contribution of MGNREGS wage to individual income of respondents

Table 4.12: Contribution of MGNREGA Wage to Individual Income

Sl. No. % of Contribution No. of respondents Percentage 1 Up to 25 49 13 2 25 – 50 69 17 3 50 – 75 98 26 4 75 – 100 168 44 Total 384 100 Source: Survey data

Some of the respondents are working and earning from other sources during the work holidays of MGNREGS. But the major constituent of their individual income is MGNREGS Wages. 44% of the respondents earn 75% to 100% of their individual income from the scheme. It shows that Scheme is the only source of their income and they do not prefer any other job when the scheme is not active. Survey data reveals that workers who earn major part of their income from the scheme are house wives and those who earn from source other than MGNRERGS mostly are agricultural labourers. A few of the respondents are working at construction sites and some others do farming when the scheme works are not available. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 81

4.2.11 Market wage rate analysis

Table 4.13: Average Market Rural Agricultural Sector Wages in Kozhikode District

% Increase % Increase Sl. Market Sl. Market Year over previous Year over previous No. Wage No. Wage year year Before introducing MGNREGA After introducing MGNREGA 1 2001-02 170 - 8 2008-09 260 -5.45 2 2002-03 195 14.71 9 2009-10 290 11.54 3 2003-04 205 5.13 10 2010-11 345 18.97 4 2004-05 218 6.34 11 2011-12 375 8.70 5 2005-06 235 7.80 12 2012-13 390 4 6 2006-07 255 8.51 13 2013-14 425 8.97 7 2007-08 275 7.84 Source: Department of agriculture Govt. of Kerala

Figure 4.7: Figure 4.8: Market rural agricultural Market rural agricultural sector average wage rate in Kozhikode sector average wage rate in Kozhikode District before introduction of the scheme District after introduction of the scheme

450 500 400 425 350 375 390 345 275 250 255 300 290 218 235 260 195 205 200 150 170 100 50 0 -50 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 - 02 - 03 - 04 - 05 - 06 - 07 - 08 - 09 - 10 - 11 - 12 - 13 - 14

Unpaired t test result

P Value and Statistical Significance: The two-tailed P value equals .8706. By Conventional criteria, this difference is considered to be no statistically significance. Hence the Hypotheses MGNREGA has caused for increase in market wage rate has been rejected. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 82

Intermediate values used in calculation:

t = 0.1672 df = 10 Standard error of difference=3.589

It can be concluded that the introduction of the MGNREGS has not been a reason for the wage hike in agricultural sector. In many studies conducted inside and outside the state of Kerala concluded that MGNREGA has caused for the increase in agricultural sector wages. But in the case of Kozhikode district, due to the influence of NRI remittance market wage rate was always higher than the MGNREGA wage.

4.2.12 Relationship between increase in MGNREGA wage and increase in rural average agriculture sector wage

Table 4.14: Comparison of % Increase in MGNREGA Wages and % Increase in Rural Agricultural Wages

% of increase Avg. rural % of increase MGNREGA Year over previous agriculture over previous wages year wages year 2007-08 125 - 275 - 2008-09 125 0 260 -5.45 2009-10 136 9 290 11.54 2010-11 150 10 345 18.97 2011-12 164 9 375 8.70 2012-13 180 10 390 4.00 2013-14 212 18 425 8.97 Source : MGNREGA Website and Department of Agriculture Govt. of Kerala Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 83

Figure 4.9: Comparison between increase in MGNREGA Wages and Rural Agriculture Wages

450 425 400 390 375 350 345 300 290 275 250 260 200 212 MGNREGA Wages 180 164 150 150 Rural Agriculture Wages 125 125 136 100 50 0 2007 - 2008 - 2009 - 2010 - 2011 - 2012 - 2013 - 08 09 10 11 12 13 14

Correlation coefficient between two series are 0.59, it reveals that both series are positively correlated but not fully positively correlated. Hence the hypothesis ‘there is significant relationship between increase in wage rate of agriculture labour and increase in wage rate of MGNREGA is rejected. Correlation coefficient tool have positive value since both the wages has increased overtime.

4.2.13 Preference of Agricultural labour over MGNREGA

Table 4.15: Willingness to Accept Agricultural Employment, when MGNREGA Scheme is Not Active

Sl. No. Willingness No. of respondents Percentage 1 Yes 243 63 2 No 116 30 3 No opinion 25 7 Total 384 100 Source: Survey data

63% of the sample population responds that they are willing to accept agricultural sector employment during the work holidays of MGNREGA scheme and 30% of them opined that they are not willing to engage in agricultural sector Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 84 when the scheme is not active. 25 persons from the sample population have no opinion on this query.

Table 4.16: Preference of Agricultural Sector Job Over MGNREGA

Sl. No. Preference No. of Respondent Percentage 1 Prefer agriculture job 159 66 2 Prefer MGNREGA 76 31 3 No opinion 8 3 Total 243 100 Source: Survey data Researcher asked the preference of workers on agricultural job over MGNREGA when both opportunities are available at a time. This question was asked only to those employees who are willing to work in agricultural field when MGNREGA scheme is no active. Responses reveals that most of them prefer to work in agricultural field and only 31% of the respondents are only sticking on to MGNREGA.

Table 4.17: Reasons for Preferring Agricultural Job Over MGNREGA

Level of Agreement Sl. Statements Strongly No. Agree Disagree Agree 1 MGNREGA wages is less than agriculture 117 40 2 labour 2 Working time is less in case of agricultural 89 58 12 labour 3 Effort in agricultural job is high 127 26 6 4 Payment of MGNREGA wages are delayed 147 12 - 5 Agriculture sector offer more work days in a 143 16 - year 6 Repeated nature of agriculture job helps to 114 36 9 improve efficiency 7 MGNREGA works can be arranged during 76 43 40 off season Source: Survey data Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 85

Out of the sample population of 384 workers 103 workers were working in agricultural sector before enrolling to MGNREGA and only 89 of them are engaged in agricultural job during the work holidays of MGNREGS. 243 of the sample population are willing to accept agricultural job when the scheme is not active and out of this 243 workers 66% prefer agricultural job over MGNREGA. Reasons of preferential treatment are high wage rate, prompt payment, less working time and the help from officials to arrange the MGNREGA work during the off days of agriculture.

Results of the above analysis shows that in case of Kozhikode district MGNREGA workers who were employed in agriculture field earlier and who prefer to work in this sector consider agriculture sector as prime provider of employment; and they prefer agriculture over MGNREGA. Hence MGNREGS has not created any negative impact on the agricultural sector labour supply of Kozhikode District and it has not caused any shortage for labour supply in agriculture sector.

4.2.14 Social inclusion of MGNREGA workers

Table 4.18: Social Inclusion Status of Workers after Enrolling to MGNREGA

Weighted score of response category Total Mean Variable weighted Greatly Fairly No Score improved improved improvement score Ability to handle stress 627 292 29 948 2.47 Attendance in meetings 741 226 24 991 2.58 Decision making 597 276 47 920 2.40 capacity Public speaking 708 212 42 962 2.51 capacity Ability to express 789 174 34 560 1.46 opinions Ability to mentor 93 228 239 827 2.15 people Documentation capacity 591 184 95 870 2.27 Political involvement 657 254 38 949 2.47 Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 86

Weighted score of response category Total Mean Variable weighted Greatly Fairly No Score improved improved improvement score Gram Sabha 906 58 53 1017 2.65 participation Care in children 789 184 29 1002 2.61 education Mobility freedom 339 144 199 682 1.78 Enrollment in 237 56 277 570 1.48 continuing education Participation in SHGs 708 214 41 963 2.51 Group cohesiveness 747 172 49 963 2.51 Self confidence 906 126 19 1.51 2.74 Total 34.58 Source: Survey data

Social inclusion index = Mean score / Number of variables = 34.58/15=2.31

From the above statistical analysis, it is detected that for all the variables have a mean score of 2.31 or values nearer to it, MGNREGA workers especially women have attained social empowerment. Considering certain variables like improvement in self-confidence group cohesiveness, attendance in meetings, attendance in Grama Sabha and participation in SHGs women have improved significantly after their enrollment in MGNREGA. But in cases like freedom of mobility, ability of mentoring and enrollment in continuing education, a minor improvement has been noted. Since mean score of most of the variables lie near the social empowerment index, so the hypothesis “MGNREGA has certain role in social inclusion of its workers” has been accepted and came to a conclusion that MGNREGA has become a medium for the social inclusion of the workers especially rural women. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 87

4.2.15 Economic empowerment of MGNREGA workers

Table 4.19: Economic Empowerment Status of Workers after Registering Under MGNREGA

Weighted score of response category Total Mean Variable weighted Greatly Fairly No Score improved improved improvement score Total family income 861 98 48 1007 2.62 Standard of living 348 302 117 767 2.00 Personal income 924 98 27 1049 2.73 Contribution to family 849 166 18 1033 2.69 income Spending pattern 666 222 51 939 2.45 Fashion conscious 267 330 130 727 1.89 Dependence to micro 789 194 24 1007 2.62 finance Saving through SHGs 873 176 5 1054 2.74 Thinking on self- 708 214 41 963 2.51 employment Self-shopping 276 326 129 731 1.90 Investment in home 741 222 26 989 2.58 appliances Consumption pattern 639 214 64 917 2.39 Self-reliance 714 206 43 963 2.51 Book keeping skills 288 156 210 654 1.70 Quality consciousness 558 294 51 903 2.35 Total 35.68 Source: Survey data Index of Economic Empowerment = Total mean score / number of variables = 35.68/ 15 = 2.38 As per the above analysis in cases of variables having a mean score of 2.38 or a values nearer to it, the enrolled workers especially women members are found to be economically empowered. In case of majority of the variables identified by the researcher as the factors influencing economic empowerment mean scores are equal or neared to the index. Workers are hardly improved in the case of variables like Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 88 book keeping skills, self-shopping and fashion consciousness. Since mean score of majority of the identified variables are nearer to the index, the hypothesis “MGNREGS has certain role in economic empowerment of workers” is accepted and concluded that scheme has certain positive impact on the economic empowerment of rural people especially the weaker session.

4.2.16 MGNREGA and financial inclusion of rural women

Table 4.20: Financial Inclusion Status of Women Workers After Registering under MGNREGA

Weighted score of response Total category Mean Variable weighted Strongly Score Agree Disagree score agree Opened bank account 879 118 5 1002 2.81 Started regular banking habit 741 176 22 939 2.45 Familiar with bank documents 375 264 100 739 1.92 Started savings 579 254 37 870 2.27 Holding debit card 588 236 43 867 2.26 Started to borrow from bank 249 184 182 615 1.60 Started to invest in SHGs 657 224 26 907 2.36 Started to avail micro credit 558 286 28 872 2.27 Stressing to prompt repayment of 489 224 82 795 2.07 loan Started own spending 489 252 68 809 2.11 Attained expertise in fund 309 136 186 631 1.64 management Held insurance policy 354 138 170 662 1.72 Started buying on installment 648 190 46 84 2.30 scheme Joined in indigenous chitty 807 134 21 962 2.51 Got role in family finance decision 597 196 60 853 2.22 Total 32.51 Source: Survey data Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 89

Financial Inclusion index = Total mean score / Number of variables = 32.51/15 = 2.17 Financial inclusion means availability of useful and affordable financial products and services that meet the needs of individuals and delivered in a responsible and sustainable way. From the above analysis it is observed that, for all variables with mean score of 2.17 or a value nearer to it, women workers of MGNREGA attained financial inclusion. In case some variables like holding insurance policy, bank borrowings etc. mean scores have a lesser value, so in these cases there is a need of improvement. Mean score of all most all variables attained a value equal to or nearer to the index; hence the hypothesis “MGNREGA has resulted in financial inclusion of rural women” has been accepted.

4.2.17 Problems faced by MGNREGS workers Table 4.21: Problems of MGNREGS Identified by the Workers

Level of agreement Particulars Strongly Total Agree Disagree Agree MGNREGA wage rate is very low 297 69 18 384 Payment of wage is delayed always 309 66 9 384 Always not getting guaranteed work days 156 163 65 384 Increase in wage rate will help to reduce 247 83 54 384 migration cities for job Asset created are not long lasting 195 98 91 384 Procedural delays are there 319 48 17 384 Clash between agriculture season and 136 63 185 384 MGNREGS work exist Political influence affect the effectiveness of work 176 87 121 384 Lacking support from Govt. officials 117 157 110 384 Supervision is very poor 18 27 339 384 There are delay in issue of job cards 208 117 59 384 Lacking expertise to perform all the jobs 307 52 25 384 Facing shortage of tools 263 78 43 384 Work hours are very lengthy 136 147 101 384 Work allotted per worker is always less 99 171 114 384 Source: Survey data Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 90

According to the workers of MGNREGA the scheme has its own merits and limitations. Researcher asked the workers to produce their level of agreement on various issued identified the researcher through observation of MGNREGS activity. Most of the workers in the sample population opined that Wage rate of the scheme is very low and it should be increased to the market wage prevailing in each locality. Regarding the guaranteed days of employment, around 80%of the sample population expressed that they are not getting guaranteed 100 days of employment in a financial year. Central Government introduced the program as a flagship programme to eradicate poverty and unemployment, but as per the opinion of workers procedural delays are always exist in issue of job card, work allotment and wage payment.

Majority of the respondents said that they are lacking expertise to perform all the scheduled works of the scheme and the scheme has no provision to give training to participants. A major portion of the sample population are working in farming sector when MGNREGA works are not available and they in the opinion that sometimes works under the scheme are scheduled during the period of farming and harvesting. This may badly influence on the annual family income and livelihood expenses of MGNREGS workers. About 75% of the respondents observed that ruling political parties in the local bodies have certain role in scheduling the working and allotment of work and they also opined that the most of the time it reduce the transparency of the scheme. Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 91

4.2.18 Improvements in MGNREGA expected by the workers

Table 4.22: Workers Expectation on MGNREGA

Level of agreement Particulars Strongly Total Agree Disagree Agree Wage rate should be increased to market rate 349 17 18 384 There should be system for monthly payment 298 49 37 384 At least 200 days work should be provided 198 96 90 384 Work hour should be reduced and should 107 114 163 384 make working time more productive Cooperative farming should be entertained 247 102 35 384 Govt. Should ensure the smooth conduct of 364 20 0 384 the scheme. Non farming related works should be 116 129 139 384 scheduled during off season Provisions should be included in the Act to 302 46 36 384 get full support from Govt. Officials Political interference could be reduced 154 129 101 384 Qualified supervisors should be appointed 35 27 322 384 Work may be allotted according to the 263 96 25 384 expertise of workers On the job or off the job training may be 117 108 159 384 provided Fund should be allocated to purchase tools 323 46 15 384 Work allotment should be based on the work 96 172 96 384 load assessment Should increase the effectiveness of social 95 103 186 384 audit system Source: Survey Data

MGNREGA workers have their own suggestions to improve functioning of the scheme and most of them are recommending certain things from their experience with the Act during the last couple of years. They have a uniform Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 92 opinion on the increase in the wage rate of the scheme. Current rate of wage is not enough to meet the increasing livelihood expenses and it is far below the market wage rate prevailing in Kozhikode district. They also suggest to having a system that ensure monthly payment of wages. According to the respondents works allocated under the scheme are sometimes not suited to their expertise or efficiency, so most of them are very positive in allocating work according to efficiency of workers.

Nature of work under the scheme is entirely different from one to another and different tools are required to perform different jobs. At present there is no provision of fund to purchases tool under MGNREGS; an annual provision may be provided to workers for buying tools for their work. Another opinion of the sample population is that length of working time can be reduced and the measures should be taken to improve the effectiveness actual working hours. Around 40 % of the sample population is actively engaged in faming activity and they have an opinion that sometime works under the scheme are scheduling during the peak season of farming and it will lead to decline in their work days and income. This issue can be solved by scheduling nonagricultural related MGNREGA works during the offseason of agriculture.

4.3 Conclusion

The analysis reveals that introduction of the programme MGNREGA has created a great socio economic impact in Kozhikode District. When the scheme was introduced for the first time in Kerala in Wayanad and Plalakkad districts, both the districts were facing severe crisis in the agricultural sector. Suddenly, after the introduction of the scheme, workers shifted from agriculture to MGNREGA and this has caused for reduction in agricultural sector labour supply in these two Districts. But the situation of Kozhikode district is entirely different, average rural agriculture wage rate in the district is always higher than MGNREGS wages and most of the time it is almost double. Higher market wages has caused for the reverse movement Impact of MGNREGS on Agricultural Labour Supply of Kozhikode District 93 of workers who left agriculture in initial years of MGNRGA, especially in the case of male employees.

Another remarkable feature of MGNREGA in Kozhikode district is that around 45 % of the registered workers are house wives and they are not willing to work anywhere other than MGNREGS. Only 40 to 50 % of the registered workers are actively participating in farming activities in the district and they still prefer to work in the same sector even when the MGNREGA works are viable. Hence, it can be substantiated that MGNREGS does not create any negative impact on agricultural sector labour supply of Kozhikode district or does not hold much of the potential agricultural labourers.

Finding, Policy Recommendation and Conclusion 94

Chapter V FINDING, POLICY RECOMMENDATION AND CONCLUSION

5.1 Introduction

This study has explored the impact of Mahatma Gandhi National Rural Employment Guarantee Act on Agricultural labour supply of Kozhikode District in Kerala. Study is purely based on the primary data collected from the region. A minor portion of secondary data is also used for the comparison purpose. Study reveals that MGNREGS does not hold any portion of the agricultural laborers or potential agricultural sector labourers. Another interesting fact of the study is that MGNREGA does not have any role in the hike of agricultural sector wage rate. But the Scheme has been found very effective in eradicating rural poverty and unemployment. Moreover MGNREGA has become a medium for the social and economic empowerment of rural mass especially women and other marginalized community like SC/ST. Major findings and policy recommendations based on the finding are outlined below for the effective implementation of the scheme MGNREGS.

5.2 Findings

. During the initial years of the implementation of the MGNREGA, rate of enrolment was very high but this rate has diminished gradually. This reveals that the scheme is not much attractive among the younger generation; moreover they are highly qualified and skilled to perform jobs offering high quality of work life. Age of enrolled workers is also pointing to the same fact; being the sample population’s age below 30 occupies a minor portion.

. In Kozhikode district rate of registration of male workers are much below the national average and most of the registered male members are not active in the scheme. A greater portion of the active male members belong to the age group between 60 and 70. It shows that only those who have retired from their active Finding, Policy Recommendation and Conclusion 95

work life are participating in the scheme. Rural wage rate in the district is always higher than the MGNREGA wage, so the male workers prefer to work in other opportunities or they are migrating to cities for better livelihood.

. Ratio of various religion and Casts in the sample population shows that in Kozhikode District there is an equitable distribution of MGNREGA activity among different religion and casts including SCs and STs. Moreover it reveals the acceptance of the scheme among various communities in the district.

. About 45% of the enrolled workers were very active in agricultural employment before implementing the scheme and they are still working in the same sector during the work holidays of the scheme. Some of them prefer agriculture job over MGNREGA even when the scheme is active.

. Another interesting fact of MGNREGA in Kozhikode district is that about 43% of the sample population is house wives and most of them are not willing to accept any opportunities other than MGNREGA. Because they are attracted to MGNREGA since it is a Government initiative and they are expecting benefits like pension, insurance etc. from the scheme.

. Annual family income of the respondents reveals that majority of the workers are from the marginalized wing of the society and struggling to meet their livelihood expenses. For a portion of the sample population MGNREGS wage is the only source of their annual income and some of them are earning from other sources of income. MGNREGA wages occupies a significant portion in the total annual family income of the respondents and also have a larger share in the individual income of the respondents. Hence, all these facts evidenced that MGNREGA has created a great impact on the livelihood improvement of Indian rural population.

. Kozhikode District is a developed district among the 14 districts of Kerala and the major source of the income of the district is NRI remittance, especially form gulf countries. Wage rate in agriculture and other sectors in the district are always higher than the state and national average. Comparing the hike in wage Finding, Policy Recommendation and Conclusion 96

rates before and after the implementation of MGNREGA, it is very clear that MGNREGA does not hold any role in the hike in rural agricultural wage rates in the district. It is also very clear that increase in MGNREGA wages and increase in market wages do not have any significant relationship.

. About 60 % of the sample population is willing to work in the agriculture sector, but they prefer a viable environment for work and not willing to travel more for employment. Some of them prefer agricultural sector job over MGNREGA and have specific reasons for that like; high wage rate in agriculture, less working time, prompt payment of wages, it provides more number of work days and they have an opinion that MGNREGA scheme can be opt during offseason. All these facts show that MGNREGA has not caused for shortage in agricultural sector labour supply of Kozhikode district. Instead, scheme provides indirect support to agricultural sector by ensuring water supply, reducing soil erosion and creates rural assets.

. “Social inclusion is the process of refining the terms on which individual and groups take part in the society- enhancing the ability, chance, and pride of those disadvantaged on the basis of their identity”. Survey data shows that majority of the participants of the scheme MGNREGS are from sidelined portion of the society and implementation of the scheme and the financial benefit provided by the scheme have resulted in bringing them form their own cage. There has been a remarkable improvement in the societal participation of the MGNREGA workers especially in case women and SCs and STs. So it has become a medium for the social inclusion of weaker sessions of the society.

. “Economic empowerment is the ability of people to take part in, contribute to and benefit from growth process in ways that recognise the value of their earnings, respect their poise and make it possible to negotiate an equitable dispersal of the sweets of growth”. While making a detailed analysis of the economic implications of MGNREGA it is very clear that its impact is very strong and long lasting. In the sample population only 55 % have source other Finding, Policy Recommendation and Conclusion 97

than MGNREGA and the 45% of them are earning from the scheme. In case of certain families MGNREGS is the only source of their income. Considering the factors which lead to economic empowerment, it is very clear that there has been a remarkable improvement in all these factors after the introduction of the scheme. So it can be concluded that MGNREGA is very successful in channelizing our rural society to economic empowerment.

. Another achievement of MGNREGA is that it has a reasonable role in the process of financial inclusion of rural mass, especially rural women. Most of the participants of sample population have opened their bank account after enrolling to this scheme since it is compulsory to have an account to transfer MGNREGA wages. Gradually they started regular banking habit to withdraw money and deposit their savings. As they have regular source of income, started approaching micro credits to meet their urgent needs.

. MGNREGA has created a boom in Indian rural economy, but still hold certain limitation in both implementation and operation. Most of the time concerned local bodies are not providing guaranteed number of work days and some procedural delays also exist like delay in issue of job card, delay in assignment of work etc. All the participants of the Sample population opined that there is a frequent delay in transferring of wages. Even though the scheme is providing opportunity for unskilled manual work, a major portion of the workers do not possess minimum expertise to perform the assigned task. While comparing MGNREGA wages with rural average market wage rate, rural agricultural wages are almost double of the scheme wage.

5.3 Policy Recommendations

. MGNREGA scheme can be modified to accommodate youngsters and skilled labourers. Scope of Work under the scheme should be widened and works preferred by educated people who expect white or blue collar job may be included in the scheme. Finding, Policy Recommendation and Conclusion 98

. Enrollment rate of male members is very less and those who have already got registered under the scheme are not active also. Difference in the wages of MGNREGA and market wages is the main reason behind this situation. Authorities should take necessary steps to increase the wages according to the hike in the market wages and increase in the cost living.

. Most of the time, the scheme provides works which require lesser efficiency and expertise, so people think that scheme is a place to handle riskless jobs and to take frequent rests. So the structure of the job must be changed and should be a mix of risky and riskless assignments.

. MGNREGA guarantees 100 days of employment in a financial year, but the survey data reveals that most of time workers are not getting the guaranteed 100 days of employment. Moreover wages of 100 days of employment is not enough to meet the increasing cost of living for a family dependent to this scheme. So the scheme should be revised in such a manner that each worker in the scheme is getting an average 200 days of employment in a year.

. Most of the members of the sample population opined that issue of job cards is always delayed and procedural delays are happening in the case of work assignment and allocation. So the instructions should be given to officials to strictly follow the provisions of the Act.

. Co-operative farming can be practiced to get maximum support from MGNREGA to agriculture sector. Co-operative farming has two side impacts; expenditure of the scheme can be reduced to minimum by allocating MGNREGA workers to farmers and farmers should remit he wages to the concerned local body. This will help the farmers in reducing their cost of cultivation because they need to pay only the wages recommended in the act and the farmers can ensure the required number of labourers also. Other benefits of cooperative farming are the availability of maximum work days in a year, increase in agricultural productivity and prompt payment of wages to workers. Finding, Policy Recommendation and Conclusion 99

. Delay in the transfer of wage is the main reason which reduces the attraction of the scheme. This anomaly should be corrected to gain the attraction of the crowd. Most of the workers and their families are dependent to the income from this scheme, so the unexpected delay may create more issues in their families.

. A considerable portion of the sample population are depending both agriculture and MGNREGA for earning their bread and butter. They have a suggestion to schedule the non-agriculture related work under MGNREGA during the off season of farming. Otherwise they may loss the work in agriculture field which provides higher wages.

. MGNREGA offers unskilled manual work to rural labour force and scheme offers available works to those who need employment. But all the work requires a minimum level of expertise, so training programmes may be arranged under the scheme to give basic level of training to the workers. This will improve the effectiveness of the work. In future work can also be scheduled according to the experience and expertise of workers.

. Works under the scheme requires different tools because nature of the work is always different and not repetitive in nature. But the scheme does not provide any provision for the purchase of tools. So there should be an annual provision under MGNREGA for purchase and maintenance of tools.

. MGNREGA scheme has been implemented under the control and supervision of Local Self Governments and some participants are concerned about the interference of political parties in the scheme, where they are doing favors to the supporters of their political ideology. So the scheme should be made fully free from the political influence and authorities should ensure the transparency of the Act.

. Few of the sample population revealed that work allocation under the scheme is not based on the work load assessment and this will lead to wastage of labour hours. Scientific allotment of work should be done so as to increase the Finding, Policy Recommendation and Conclusion 100

efficiency and effectiveness of the work. Length of a work day under the scheme is 8 hours including the break time. Workers have an opinion that the 8 hours of work is not utilized effectively by the members anyway, so the length of working time can be reduced to 6 hours and proper measures should be taken to utilize them effectively.

5.4 Conclusion

The study is carried out to know the impact of MGNREGA on the agricultural sector labour supply of Kozhikode District. Many studies of same kind have conducted in various places in India and there are some studies conducted in Kerala also in the related area. Results of the studies conducted in various states of India reveals that MGNREGA has caused for the shift of workers from agricultural sector to other sectors. But in the case of Kozhikode District situation is entirely different, market wage rate in the district is very high and it is always very higher than the national average. Because of this workers prefer agricultural sector labour over MGNREGA and they have a chance to schedule their work under MGNRGA during the offseason of farming.

In case of most of the states in India, MGNREGS has caused for the increase in agricultural wage rate and led to hike in cost of cultivation. Shortage of labour and sudden increase in the wages put the farmers in pressure and in the initial years of MGNREGA this situation has resulted in the decrease in agricultural production of the country. Average rural market wages of agricultural sector in the Kozhikode district is very high compared with the national and state average. Comparing the rate of increase in wages before and after the implementation of MGNREGA, it is very clear that the rate of increase is almost stable and MGNREGA does not hold any role in wage hike in the district. Moreover the rate of hike in wages is not directly related to the increase in the wages under MGNREGA.

MGNREGA has greater impact on the lives of marginalized sections of our society, especially in the lifestyle of women. It has influenced the societal life of the Finding, Policy Recommendation and Conclusion 101 workers and led to the social inclusion of women and SCs/STs. Cost of living has been increasing day by day and it has created difficulties in managing all the household expenses from a single source of income. Introduction of MGNREGA gives opportunities to women for earning a fixed amount of income in a financial year and resulted in the increase in their annual family income. So this scheme is helpful in leading a better livelihood among rural families. Workers under the scheme need to open a bank account for transferring their wages; this has forced them to hold a bank account which made them gradually start regular banking habit. This has resulted in the financial inclusion of this weaker session of the society.

5.5 Contribution of the Study

People are thinking that MGNREGA has caused for the shortage of labour in the agriculture sector and there is a common thinking that introduction of the scheme has resulted in the increase in wages too. So there was an urgent need for making a scientific study to know the fact behind this common understanding. This study reveals that both the criticisms were wrong and the things are very positive in case of agriculture field. The study reveals that the scheme has great influence on social and economic life of the participants and this has caused for the social and economic empowerment of the workers under the scheme.

5.6 Scope of Further Research

1. A study can be conducted to recommend certain amendments to the Act to solve issues with operation and functioning of MGNREGA.

2. A study can be conducted to assess the social and economic impact of MGNREGA among SCs and STs. BIBLIOGRAPHY

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Web Sources  www.mospi.go.in  www.nrega.nic.in  www.planningcommission.gov.in  www.censusindia.gov.in  www.nrlm.gov.in  www.rural.nic.in  www.agriculture.gov.in  www.labour.gov.in  www.employmentkerala.gov.in  www.kerala.gov.in  www.rbi.org.in  www.undp.org  www.ilo.org Appendix-I AN ANALYTICAL STUDY ON IMPACT OF MGNREGS ON AGRICULTURAL LABOUR SUPPLY OF KOZHIKODE DISTRICT Questionnaire for MGNREGA Members

Name Panchayat Ward

Part – I PERSONAL PROFILE 1. Age

2. Gender Male Female

3. Religion Hindu Muslim Christian

Others

4. Cast Upper OBC SC

SC Others

5. Educational Illiterate Primary Secondary Qualifications Higher Graduation Above Secondary Graduation

6. Marital Status Married Unmarried Widowed

7. Year of enrollment 2008 - 09 2009 – 10 2010 – 11

2011 – 12 2012 – 13 2013 – 14

8. Occupation Agriculture Homemaker Farming Labour

Private Self Construction employment employed

Others Unemployed

9. Source of worker’s Agricultural Farming Private income other than labour employment MGNREGA Self Construction Others employed

No other source Appendix 107

10. Annual family Upto 25000 25000 – 50000 – income 50000 75000

75000- Above 100000 100000

11. Individual income Upto 25000 25000 – 50000 – 50000 75000

75000 – Above 100000 100000

12. MGNREGA Upto 25000 25000 – 50000 – Wages 50000 75000

75000 – Above 100000 100000

13. Willing to work in Agriculture labour Yes No when MGNREGA is not available

14. Willing to prefer agricultural labour Yes No over MGNREGA

15. Reasons for preferring agricultural job over Strongly Agree Disagree MGNREGA agree MGNREGA wages is less than agriculture labour Working time is less in case of agricultural labour Effort in agricultural job is high Payment of MGNREGA wages are delayed Agriculture sector offer more work days in a year Repeated nature of agriculture job helps to improve efficiency MGNREGA works can be scheduled during offseason

16. Changes happened in Social life after Greatly Fairly No enrollment into MGNREGA improved improved improvement Ability to handle stress Attendance in meetings Decision making capacity Public speaking capacity Appendix 108

Ability to express opinions Ability to mentor people Documentation capacity Political involvement Gram Sabha participation Care in children education Mobility freedom Enrollment in continuing education Participation in SHGs Group cohesiveness Self confidence

17. Changes happened economic life after Greatly Fairly No enrollment into MGNREGA improved improved improvement Total family income Standard of living Personal income Contribution to family income Spending pattern Fashion conscious Dependence to micro finance Saving through SHGs Thinking on self-employment Self-shopping Investment in home appliances Consumption pattern Self-reliance Book keeping skills Quality consciousness

18. Changes happened in financial life after Strongly Agree Disagree enrollment into MGNREGA agree Opened bank account Started regular banking habit Familiar with bank documents Started savings Appendix 109

Holding debit card Started to borrow from bank Started to invest in SHGs Started to avail micro credit Stressing to prompt repayment of loan Started own spending Attained expertise in fund management Held insurance policy Started buying on installment scheme Joined in indigenous chitty Got role in family finance decision

19. Problems faced by MGNREGA members Strongly Agree Disagree agree MGNREGA wage rate is very low Payment of wage is delayed always Always not getting guaranteed work days Increase in wage rate will help to reduce migration cities for job Asset created are not long lasting Procedural delays are there Clash between agriculture season and MGNREGS work exist Political influence affect the effectiveness of work Lacking support from Govt. officials Supervision is very poor There are delay in issue of job cards Lacking expertise to perform all the jobs Facing shortage of tools Work hours are very lengthy Work allotted per worker is always less

Strongly 20. Improvements expected in MGNREGA Agree Disagree agree Wage rate should be increased to market rate There should be system for monthly payment Appendix 110

At least 200 days work should be provided Work hour should be reduced and should make working time more productive Cooperative farming should be entertained Govt. Should ensure the smooth conduct of the scheme. Non farming related works should be scheduled during off season Provisions should be included in the Act to get full support from Govt. Officials Political interference could be reduced Qualified supervisors should be appointed Work may be allotted according to the expertise of workers On the job or off the job training may be provided Fund should be allocated to purchase tools Work allotment should be based on the work load assessment Should increase the effectiveness of social audit system